20-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report                     

For the transition period from                      to                     

Commission file number 001-35991

GRAÑA Y MONTERO S.A.A.

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant’s name into English)

Republic of Peru

(Jurisdiction of incorporation or organization)

Av. Paseo de la República 4667

Surquillo

Lima 34, Peru

(Address of principal executive offices)

Daniel Urbina Pérez, Chief Legal Officer

Tel. 011-51-1-213-6565

relacion.inversionistas@gym.com.pe

Av. Paseo de la República 4667

Surquillo

Lima 34, Peru

(Name, telephone, e-mail and/or facsimile number and address of company contact person)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Shares, par value s/1.00 per share, American Depositary Shares, each representing five Common Shares	GRAM	New York Stock Exchange* New York Stock Exchange

* Not for trading purposes, but only in connection with the registration on the New York Stock Exchange of the American Depositary Shares representing those common shares.

Securities registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation

pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

At December 31, 2019 871,917,855 shares of common stock

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☐    No  ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes  ☐    No  ☒

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☐    No  ☒

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ☐ Accelerated filer  ☒ Non-accelerated filer  ☐ Emerging growth company  ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards^† provided pursuant to Section 13(a) of the Exchange Act.  ☐

^†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☒

Indicate by check mark which basis of accounting the Registrant has used to prepare the financial statements included in this filing:

U.S. GAAP   ☐ International Financial Reporting Standards as issued by the International Accounting Standards Board  ☒ Other   ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow. Item 17  ☐    Item 18  ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

TABLE OF CONTENTS

		Page
PART I. INTRODUCTION			1
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS		6
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE		6
ITEM 3.	KEY INFORMATION		6
A.	Selected Financial Data		6
B.	Capitalization and Indebtedness		14
C.	Reasons for the Offer and Use of Proceeds		14
D.	Risk Factors		14
ITEM 4.	INFORMATION ON THE COMPANY		42
A.	History and Development of the Company		42
B.	Business Overview		43
C.	Organizational Structure		100
D.	Property, Plant and Equipment		102
ITEM 4A.	UNRESOLVED STAFF COMMENTS		102
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS		102
A.	Operating Results		103
B.	Liquidity and Capital Resources		127
C.	Research and Development, Patents and Licenses, Etc.		133
D.	Trend Information		133
E.	Off-Balance Sheet Arrangements		137
F.	Tabular Disclosure of Contractual Obligations		138
G.	Safe Harbor		138
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES		138
A.	Directors and Senior Management		138
B.	Compensation		145
C.	Board Practices		146
D.	Employees		148
E.	Share Ownership		150
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS		151
A.	Major Shareholders		151
B.	Related Party Transactions		152
C.	Interests of Experts and Counsel		153
ITEM 8.	FINANCIAL INFORMATION		153
A.	Consolidated Statements and Other Financial Information.		153
B.	Significant Changes.		155
ITEM 9.	THE OFFER AND LISTING		156
A.	Offer and Listing Details		156
B.	Plan of Distribution		156
C.	Markets		156
D.	Selling Shareholders		158
E.	Dilution		158
F.	Expenses of the Issue		158
ITEM 10.	ADDITIONAL INFORMATION		158
A.	Share Capital		158
B.	Memorandum and Articles of Association		158
C.	Material Contracts		158
D.	Exchange Controls		160
E.	Taxation		160
F.	Dividends and Paying Agents		166
G.	Statement by Experts		166
H.	Documents on Display		166
I.	Subsidiary Information		166

i

ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	166
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	167
A.	Debt Securities	167
B.	Warrants and Rights	167
C.	Other Securities	167
D.	American Depositary Shares	167
PART II.		170
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	170
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	170
ITEM 15.	CONTROLS AND PROCEDURES	171
A.	Disclosure Controls and Procedures	171
B.	Management’s Annual Report on Internal Control Over Financial Reporting	171
C.	Attestation Report of the Registered Public Accounting Firm	173
D.	Changes in Internal Control Over Financial Reporting	173
ITEM 16.	[RESERVED]	174
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	174
ITEM 16B.	CODE OF BUSINESS CONDUCT AND ETHICS	174
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	174
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	175
ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	175
ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	175
ITEM 16G.	CORPORATE GOVERNANCE	175
ITEM 16H.	MINE SAFETY DISCLOSURE	176
ITEM 17.	FINANCIAL STATEMENTS	176
ITEM 18.	FINANCIAL STATEMENTS	176
ITEM 19.	EXHIBITS	176

ii

PART I.

INTRODUCTION

Certain Definitions

All references to “we,” “us,” “our,” “our company,” “the group” and “Graña y Montero” in this annual report are to Graña y Montero S.A.A., a publicly-held corporation (sociedad anónima abierta) organized under the laws of Peru. In this annual report, we refer to our principal subsidiaries, joint operations, joint ventures and associated companies as follows: (i) in our Engineering and Construction (“E&C”) segment: GyM S.A. as “GyM”; Vial y Vives—DSD S.A. as “Vial y Vives—DSD”; GMI S.A. as “GMI”; Morelco S.A.S. as “Morelco”; (ii) in our Infrastructure segment: Norvial S.A. as “Norvial”; Survial S.A. as “Survial”; Concesión Canchaque S.A. as “Canchaque”; GyM Ferrovías S.A. as “GyM Ferrovías”; Concesionaria La Chira S.A. as “La Chira”; GMP S.A. as “GMP”; and Concar S.A. as “Concar”; (iii) in our Real Estate segment: Viva GyM S.A. as “Viva GyM” and Inmobiliaria Almonte S.A.C. as “Almonte”. For more information on our subsidiaries, joint operations, joint ventures or associated companies, see notes 6a, 6c and 15 to our audited annual consolidated financial statements included in this annual report.

The gas pipeline concession of Gasoducto Sur Peruano S.A. (“GSP”) was terminated on January 24, 2017, and, as a result, we have recognized impairments with respect to our investment in and account receivables from GSP and our participation in the related construction consortium (Consorcio Constructor Ductos del Sur, or “CCDS”). Both GSP and CCDS are in the process of being liquidated. Additionally, we have recently sold certain assets and businesses, including: on April 24, 2017, the sale of our interest in Compañía Operadora de Gas del Amazonas (“COGA”); on June 6, 2017, the sale of our interest in GMD S.A. (“GMD”); on April 11, 2018, the sale of our interest in Stracon GyM S.A. (“Stracon GyM”); and, on December 4, 2018, the sale of our interest in CAM Chile S.A. (“CAM”) and CAM Servicios del Perú S.A. (“CAM Servicios”). In addition, we are in the process of marketing for sale our subsidiary Adexus S.A. (“Adexus”), which entered into Chilean bankruptcy proceedings on November 19, 2019. For more information, see “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Recent Developments (2017—2020)—Asset Sales.”

The term “U.S. dollar” and the symbol “US$” refer to the legal currency of the United States; the term “sol” and the symbol “S/” refer to the legal currency of Peru; the term “Chilean peso” and the symbol “CLP” refer to the legal currency of Chile; and the term “Colombian peso” and the symbol “COP” refer to the legal currency of Colombia.

Presentation of Financial Information

Our consolidated financial statements included in this annual report have been prepared in soles and in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”). Our annual consolidated financial statements as of December 31, 2018 and 2019 and for the years ended December 31, 2017, 2018 and 2019 have been audited by Moore Assurance S.A.S. (a member firm of Moore Global Network Limited) in accordance with the standards of the Public Company Accounting Oversight Board (United States).

Our consolidated financial statements for the year ended December 31, 2017 included in this annual report were restated in our annual report on Form 20-F for the fiscal year ended December 31, 2018. In our consolidated financial statements included in our annual report on Form 20-F for the year ended December 31, 2017, we inadvertently presented the gain on the sale of GMD under “Gain from the sale of investments” in error and, accordingly, we restated our 2017 income statement and the related notes to reflect GMD as a discontinued operation. The previously issued consolidated financial statements of the company for the 2017 fiscal year (and the related audit opinion) included in the company’s annual report on Form 20-F for the year ended December 31, 2017 should not be relied upon. For more information, see note 2.31 to our audited annual consolidated financial statements included in this annual report.

We manage our business in three segments: Engineering and Construction (E&C); Infrastructure; and Real Estate. Prior to December 31, 2017, in addition to the foregoing segments, we had a Technical Services segment. However, we transferred Concar from this segment to our Infrastructure segment beginning on April 1, 2017; on

1

June 6, 2017, we sold our interest in our former technical services subsidiary, GMD; and we are in the process of marketing for sale Adexus, our other technical services subsidiary. The historical segment financial information included in this annual report has been adjusted accordingly. For information on our results of operations by business segment, see note 7 to our audited annual consolidated financial statements included in this annual report.

As a result of the sale of GMD on June 6, 2017, we present GMD as a discontinued operation in our audited annual consolidated financial statements for the years ended December 31, 2017, 2018 and 2019. We have also reclassified our selected financial information for the years ended December 31, 2015 and 2016 included in this annual report to show GMD as a discontinued operation. In addition, (i) on December 4, 2018, we sold our interests in each of CAM and CAM Servicios, (ii) on April 11, 2018, we sold our interest in Stracon GyM, and (iii) we are in the process of marketing for sale our subsidiary Adexus. As a result, we present CAM, CAM Servicios and Stracon GyM as discontinued operations, and Adexus as an investment held for sale, in our audited annual consolidated financial statements for the years ended December 31, 2018 and 2019. We have also reclassified our consolidated financial statements for the years ended December 31, 2017, and the selected financial information for the years ended December 31, 2015 and 2016 included in this annual report to show CAM, CAM Servicios and Stracon GyM as discontinued operations and Adexus as an investment held for sale. We have also revised historical backlog data included in this annual report to exclude the presentation of entities that are presented as discontinued operations.

We requested that the staff of the U.S. Securities and Exchange Commission (the “SEC”) grant relief from the financial statement filing requirements of Rule 3-09 of Regulation S-X (“Rule 3-09”) pursuant to Section 2430 of the Division of Corporation Finance Financial Reporting Manual, with respect to our investment in GSP. The SEC has not granted our company’s waiver request and, as a result, our company was required to file with the SEC separate financial statements for GSP for 2015, 2016 and 2017, with 2016 being audited. However, it has been impracticable for our company to comply with this requirement, because the audit opinion that was issued with respect to GSP’s 2016 financial statements included a disclaimer; our company’s loss of significant influence over GSP; and GSP’s limited management as the entity is in insolvency proceedings. We believe that GSP’s financial statements would not provide additional material information to investors. However, we cannot assure you that that the SEC will not take actions against our company relating to our non-compliance, and, among other matters, in the event of a capital raise, our company may be temporarily unable to have a registration statement for a public offering of securities in the United States declared effective by the SEC. For more information, see “Item 3.D. Key Information —Risk Factors—Risks Related to Recent Developments (2017 - 2020)—Our inability to provide audited financial statements for GSP in accordance with Rule 3-09 may result in enforcement actions by the SEC or may, among other matters, cause us to be unable to complete a public offering in the United States.” For more information on GSP, see notes 5(e) and 15 to our audited annual consolidated financial statements included in this annual report.

Non-IFRS Data

In this annual report, we present EBITDA, a non-GAAP financial measure. A non-GAAP financial measure is generally defined as one that purports to measure financial performance, financial position or cash flows but excludes or includes amounts that would not be so adjusted in the most comparable IFRS measure. We present EBITDA because we believe it provides readers with a supplemental measure of the financial performance of our core operations that facilitates period-to-period comparisons on a consistent basis. Our management uses EBITDA, among other measures, for internal planning and performance measurement purposes. We believe that EBITDA is useful in evaluating our operating performance compared to other companies operating in our sectors because the calculation of EBITDA generally eliminates the effects of financing and income taxes and the accounting effects of capital spending, which items may vary for different companies for reasons unrelated to overall operating performance. EBITDA should not be construed as an alternative to net profit or operating profit, as an indicator of operating performance, as an alternative to cash flow provided by operating activities or as a measure of liquidity (in each case, as determined in accordance with IFRS). EBITDA, as calculated by us, may not be comparable to similarly titled measures reported by other companies. For our definition of EBITDA and a reconciliation of EBITDA to the most directly comparable IFRS financial measure, see “Item 3.A. Key Information—Selected Financial Data—Non-GAAP Financial Measure and Reconciliation.”

2

Currency Translations

Our consolidated financial statements are prepared in soles. For a description of our translation of amounts in currencies other than soles in our consolidated financial statements, see note 2.4 to our audited annual consolidated financial statements included in this annual report.

We have translated some of the soles amounts contained in this annual report into U.S. dollars and some U.S. dollars amounts contained in this annual report into soles, for convenience purposes only. Unless otherwise indicated or the context otherwise requires, the rate used to translate soles amounts to U.S. dollars and U.S. dollars amounts into soles was S/3.317 to US$1.00, which was the exchange rate reported for December 31, 2019 by the Peruvian Superintendency of Banks, Insurance and Private Pension Fund Administrators (Superintendencia de Banca, Seguros y AFPs, or “SBS”). We present our backlog in U.S. dollars. For contracts denominated in soles or other local currencies, amounts have been converted into U.S. dollars based on the exchange rate published by the SBS on December 31 of the corresponding year. When we present our ratios of backlog and revenues in this annual report, we similarly convert our revenues, which are reported in soles, into U.S. dollars based on the exchange rate reported for December 31 of the corresponding year. For conversions of macroeconomic indicators (particularly in “Item 5.D. Operating and Financial Review and Prospects—Trend Information” in this annual report), average annual exchange rates for the currencies of each of the countries addressed are used. The Federal Reserve Bank of New York does not report a noon buying rate for soles. The U.S. dollar equivalent information presented in this annual report is provided solely for convenience of the reader and should not be construed as implying that the soles or other currency amounts represent, or could have been or could be converted into, U.S. dollars at such rates or at any other rate.

Rounding

Certain figures included in this annual report have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be arithmetic aggregations of the figures that precede them.

Backlog

This annual report includes our backlog for our Engineering and Construction (E&C), Infrastructure and Real Estate segments. We do not include backlog in this annual report in our Infrastructure segment for: (i) our Norvial toll road concession because its revenues from the concession are derived from toll fees charged to vehicles using the highway, and, as a result, such revenues are dependent on vehicular traffic levels; and (ii) our Energy line of business because: (a) our revenues from hydrocarbon extraction services are dependent on the amounts of oil and gas we produce and market prices, which fluctuate significantly; (b) our revenues from our gas processing plant are dependent on the amount of gas we process and market prices for natural gas liquids, which fluctuate significantly; and (c) our revenues from our fuel storage terminal operation partially depend on the volume of fuel stored and dispatched. When we present backlog on a segment basis, we do not include eliminations that are included in our consolidated backlog. Backlog is not a measure defined by IFRS, and our methodology for determining backlog may not be comparable to the methodology used by other companies in determining their backlog. Backlog is not audited. We have revised historical backlog data included in this annual report to exclude the presentation of entities that are presented as discontinued operations. For our definition of backlog, see “Item 4.B. Information on the Company—Business Overview—Backlog.” See also “Item 3.D. Key Information—Risk Factors—Risks Related to our Company—Our backlog and our ratio of historical backlog to revenues may not be reliable indicators of future revenues or profit.”

The GSP gas pipeline concession was terminated on January 24, 2017, which had a significant impact on our backlog for our E&C and our consolidated backlog. For more information, see “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Recent Developments (2017—2020)—Termination of the Gasoducto Sur Peruano Concession.”

Reserves Estimates

This annual report includes our estimates for proved reserves in Blocks I and V, where GMP provides hydrocarbon extraction services to, and Blocks III and IV, where GMP extracts hydrocarbon under license agreements with, Perupetro S.A. (“Perupetro”). These reserves estimates were prepared internally by our team of engineers and

3

have not been audited or reviewed by any independent external engineers. For further information on these reserves estimates, see “Item 3.D. Key Information—Risks Related to Our Company—Additional Risks Related to our Infrastructure Business” and “Item 4.B. Information on the Company—Business Overview—Infrastructure—Principal Infrastructure Lines of Business—Energy—Oil and Gas Production.”

Market Information

We make estimates in this annual report regarding our competitive position and market share, as well as the market size and expected growth of the engineering and construction, infrastructure and real estate services industries in Peru and elsewhere in Latin America. We have made these estimates on the basis of our management’s knowledge and statistics and other information, which we believe to be the most recently available as of the date of this annual report, from government agencies, industry professional organizations, industry publications and other sources. While we believe these estimates to be accurate as of the date of this annual report, we have not independently verified the data from third-party sources and our internal data has not been verified by any independent source. We paid Great Place to Work ^® Institute, a human resources consulting, research and training firm, for our employees to participate in their market survey referenced in this annual report (Copyright ^© 2019 Great Place to Work ^® Institute, Inc. All rights reserved.). In this annual report we present gross domestic product (“GDP”) both on a nominal and real basis. Real GDP is nominal GDP adjusted to exclude the effect of inflation. Unless otherwise indicated, references to GDP are to real GDP.

Measurements and Other Data

In this annual report, we use the following measurements:

• “m” means one meter, which equals approximately 3.28084 feet;

• “m2” means one square meter, which equals approximately 10.7630 square feet;

• “km” means one kilometer, which equals approximately 0.621371 miles;

• “hectare” means one hectare, which equals approximately 2.47105 acres;

• “tonne” means one metric ton, which equals approximately 2,204.6 pounds;

• “bbl” or barrel of oil means one stock tank barrel, which is equivalent to approximately 0.15898 cubic meters;

• “boe” means one barrel of oil equivalent, which equals approximately 160.2167 cubic meters, determined using the ratio of 5,658 cubic feet of natural gas to one barrel of oil;

• “cf” means one cubic foot;

• “M,” when used before bbl, boe or cf, means one thousand bbl, boe and cf, respectively;

• “MM,” when used before bbl, boe or cf, means one million bbl, boe and cf, respectively;

• “MW” means one megawatt, which equals one million watts; and

• “Gwh” means one gigawatt hour, which equals one billion watt hours.

In this annual report, we use the term “accident incidence rate” with respect to our E&C segment, which is calculated as the number of injuries divided by the total number of hours worked by all full-time employees of our E&C segment during the relevant year divided by 200,000 (which reflects 40 hours worked per week in a 50-week year by 100 equivalent full-time workers).

4

Forward-Looking Statements

This annual report contains forward-looking statements. Forward-looking statements convey our current expectations or forecasts of future events. These statements involve known and unknown risks, uncertainties and other factors, including those listed under “Item 3.D. Key Information—Risk Factors,” which may cause our actual results, performance or achievements to differ materially from the forward-looking statements that we make.

Forward-looking statements typically are identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “project,” “plan,” “believe,” “potential,” “continue,” “is/are likely to,” or other similar expressions. Any or all of our forward-looking statements in this annual report may turn out to be inaccurate. Our actual results could differ materially from those contained in forward-looking statements due to a number of factors, including, among others:

• the impact that the ongoing Novel Coronavirus 2019 (“COVID-19”) pandemic, and governments’ extraordinary measures to limit the spread of the virus, will ultimately have on economic activity and the industries in which we operate;

• the impact on our business reputation from our past association with Odebrecht S.A. (“Odebrecht”) affiliates in Peru;

• the potential effects of investigations of our company and certain of our former directors and senior management, or any future investigations, regarding corruption or other illegal acts, including the outcome from our ongoing settlement and cooperation agreement discussions with Peruvian authorities;

• the potential impact of the class action civil lawsuit against our company and certain of our former directors and former and current executive officers, including the outcome of ongoing settlement discussions;

• uncertainty with regards to the timing and amount of any payment we are entitled to receive as an equity investor and creditor of GSP in connection with the government payment required as a result of the termination of the GSP pipeline concession;

• our ability to fund our working capital and other obligations through cash flow from operating activities, financing sources or the sale of assets;

• our ability to comply with the covenants in our debt instruments or obtain waivers in the event of non-compliance;

• our ability to obtain financing on favorable terms, including our ability to obtain performance bonds and similar financings required in the ordinary course of our business;

• our ability to consummate asset sales or other strategic transactions on favorable terms on a timely basis, or at all;

• global macroeconomic conditions, including commodity prices;

• economic, political and social conditions in the markets in which we operate, including as a result of political disputes between the executive branch and congress in Peru, and widespread protests in Chile and, to a lesser extent, Colombia;

• major changes in government policies at the national, regional or municipal levels, including in connection with infrastructure concessions, investments in infrastructure and affordable housing subsidies;

5

• social conflicts that disrupt infrastructure projects, particularly in the mining sector;

• interest rate fluctuation, inflation and devaluation or appreciation of the sol or Chilean peso or Colombian peso in relation to the U.S. dollar (or other currencies in which we receive revenue);

• our backlog may not be a reliable indicator of future revenues or profit;

• the cyclical nature of some of our business segments;

• the level of capital investments and financings available for infrastructure projects of the types that we perform, both in the private and public sectors;

• competition in our markets, both from local and international companies;

• volatility in global prices of oil and gas, including as a result of disputes among OPEC members;

• changes in real estate market prices, customer demand, preference and purchasing power, and financing availability and terms;

• our ability to obtain zoning and other license requirements for our real estate development;

• changes in tax, environmental, health and safety, or other laws and regulations;

• natural disasters, severe weather or other events that may adversely impact our business; and

• other factors identified or discussed under “Item 3.D. Key Information—Risk Factors.”

The forward-looking statements in this annual report represent our expectations and forecasts as of the date of this annual report. These statements are intended to qualify for the safe harbors from liability provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this annual report. In particular, the COVID-19 pandemic, and governments’ extraordinary measures to limit the spread of the virus, are disrupting economic activity and the industries in which we operate, and consequently adversely affecting our business, results of operation and financial condition and, as conditions are recent, uncertain and changing rapidly, it is difficult to predict the full extent of the impact that the pandemic will have on our company.

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

A. Selected Financial Data

The following selected consolidated financial data should be read together with “Part I. Introduction. Presentation of Financial Information,” “Item 5. Operations and Financial Review and Prospects” and our audited annual consolidated financial statements included in this annual report.

6

The following selected financial data as of December 31, 2018 and 2019 and for the years ended December 31, 2017, 2018 and 2019 have been derived from our audited annual consolidated financial statements included in this annual report. The following selected financial data as of December 31, 2015, 2016 and 2017 and for the years ended December 31, 2015 and 2016 have been derived from our audited annual consolidated financial statements not included in this annual report. Our annual consolidated financial statements for the years ended December 31, 2017, 2018 and 2019 have been audited by Moore Assurance S.A.S. (a member firm of Moore Global Network Limited) in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our consolidated financial statements for the year ended December 31, 2017 included in this annual report were restated in our annual report on Form 20-F for the year ended December 31, 2018. For more information, see note 2.31 to our audited annual consolidated financial statements included in this annual report and “Item 5. Operations and Financial Review and Prospects—Overview—Restatement of Financial Results for Fiscal Year 2017.”

	For the year ended December 31,
	2015			2016(1)			2017 Restated			2018			2019(1)			2019(1)
				(in millions of S/)												(in millions of US$)(2)
Income Statement Data:
Revenues		5,542.3			4,137.3			4,014.0			3,899.5			4,085.0			1,231.5
Cost of sales		(5,210.6	)		(3,821.2	)		(3,511.6	)		(3,225.0	)		(3,643.2	)		(1,098.4	)
Gross profit		331.7			316.1			502.5			674.5			441.8	(3)		133.2
Administrative expenses		(291.3	)		(278.3	)		(322.5	)		(278.4	)		(213.9	)		(64.5	)
Other income and expenses, net(3)		18.3			(21.9	)		(33.3	)		(61.2	)		(324.9	)		(97.9	)
Profit (losses) from sale of investments		—			46.3			34.5			—			(1.9	)		(0.6	)
Other (expenses) income, net		0.3			(0.5	)		0.5			—			—			—
Operating profit (loss)		58.4			61.8			181.7			334.7			(98.9	)		(29.8	)
Financial (expense) income, net(3)		(97.7	)		(179.8	)		(137.0	)		(197.1	)		(157.1	)		(47.3	)
Share of the profit and loss obtained from associates and joint ventures under the equity method of accounting		24.4			(590.1	)		0.5			(3.7	)		(218.8	)		(66.0	)
Profit (loss) before income tax		(14.9	)		(708.1	)		45.1			133.9			(474.7	)		(143.1	)
Income tax		(78.7	)		152.2			(46.3	)		(113.3	)		(320.0	)		(96.5	)
Profit (loss) from continuing operations		(93.5	)		(556.0	)		(1.2	)		20.6			(794.7	)		(239.6	)
Profit (loss) from discontinued operations		149.1			104.4			210.4			36.8			(44.0	)		(13.3	)
Net profit (loss)		55.6			(451.6	)		209.2			57.4			(838.6	)		(252.8	)
Net profit (loss) attributable to controlling interest(4)		7.1			(509.7	)		148.7			(83.2	)		(884.7	)		(266.7	)
Net profit (loss) attributable to non-controlling interest(4)		48.5			58.1			60.5			140.6			46.1			13.9

(1) For the effects on our results of operations for 2016 and 2019 resulting from the termination of the GSP gas pipeline concession, see “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Recent Developments (2017—2020)” and notes 5(e) and 15 to our audited annual consolidated financial statements included in this annual report. In particular, in 2016 we recognized an impairment to our investment in GSP of S/593.1 million, which is recorded in Share of the profit and loss obtained from associates and joint ventures under the equity method of accounting. As of December 31, 2019, we impaired the remaining amount of our investment in GSP. In 2019, we also recognized an impairment of US$81.5 million (S/276 million) to the long-term account receivables from GSP; adjusted the net present value of the account by US$17 million (S/58 million) pursuant to IFRS rules; and wrote off US$54 million (S/180 million) on the deferred income tax asset associated with the company’s investment in GSP, which are recorded, primarily, in Other income and expenses, net, Share of the profit and loss obtained from associates and joint ventures under the equity method of accounting, and Income tax.

(2) Calculated based on an exchange rate of S/3.317 to US$1.00 as of December 31, 2019.

(3) Reflects exchange losses due to the depreciation of the sol against the U.S. dollar and our U.S. dollar denominated liabilities. For more information, see note 27 to our audited annual consolidated financial statements included in this annual report.

(4) We consolidate the results of our subsidiaries in our financial statements and we reflect the profit corresponding to the minority interests in our subsidiaries under “net profit attributable to non-controlling interests” in our income statement. With respect to our joint operations, we recognize in our consolidated financial statements the revenue and expenses, including our share of any asset, liability, revenue or expense we hold jointly with partners. We reflect the results of our associated companies under the equity method of accounting in our consolidated financial statements under the line item “share of the profit and loss in associates” in our income statement. See “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Factors Affecting Our Results of Operations—Acquisitions,” “—General—Accounting for Subsidiaries, Joint Operations, Joint Ventures and Associated Companies” and note 2.2 to our audited annual consolidated financial statements included in this annual report.

7

	As of December 31,
	2015		2016(1)		2017		2018		2019(1)		2019(1)
Balance Sheet Data:			(in millions of S/)								(in millions of US$)(2)
Total current assets		5,200.4		4,328.7		3,891.9		2,985.5		2,865.3		863.8
Cash and cash equivalents(3)		554.0		607.0		626.2		801.1		949.0		286.1
Accounts receivables		2,143.3		1,862.5		2,381.9		1,631.2		1,302.9		392.8
Outstanding work in progress		1,278.2		680.9		61.8		28.5		49.4		14.9
Inventories(4)		1,159.2		1,104.3		770.7		514.0		552.6		166.6
Other current assets		65.7		74.0		51.3		10.7		11.4		3.4
Total non-current assets		3,699.6		4,718.0		4,775.7		4,197.1		3,333.8		1,005.1
Long-term accounts receivables(5)		687.8		1,754.4		2,180.8		2,133.5		1,623.6		489.5
Investments in associates and joint ventures		637.0		389.8		268.7		257.8		37.0		11.2
Property, plant and equipment		1,111.8		1,113.6		865.7		470.6		443.9		133.8
Intangible assets(6)		878.3		960.3		940.1		847.1		853.3		257.3
Other non-current assets		384.7		499.9		520.4		488.1		376.0		113.3
Total current liabilities		4,092.3		4,537.0		3,549.2		2,665.8		2,470.8		744.9
Short-term borrowings		1,265.1		2,007.1		1,093.4		865.6		499.0		150.4
Accounts payable(7)		2,779.6		2,453.1		2,356.7		1,768.1		1,810.3		545.8
Other current liabilities		47.6		76.8		99.1		32.1		161.5		48.7
Total non-current liabilities		1,725.8		2,019.9		2,529.4		2,048.9		1,847.5		557.0
Long-term borrowings		1,310.3		1,341.0		1,544.2		1,274.1		1,224.1		369.0
Other non-current liabilities		415.5		678.9		985.2		774.8		623.4		188.0
Capital stock		660.1		660.1		660.1		729.4		871.9		262.9
Shareholders’ equity		2,558.8		1,980.4		2,123.3		2,088.4		1,477.8		445.5
Non-controlling interest		523.1		509.3		465.7		401.6		398.3		120.1

(1) For the effects on our financial condition as of December 31, 2016 and 2019 resulting from the termination of the GSP gas pipeline concession, see “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Recent Developments (2017—2020)—Termination of the Gasoducto Sur Peruano Concession” and notes 5(e) and 15 to our audited annual consolidated financial statements included in this annual report. In particular, in 2016 we recognized an impairment to our investment in GSP of S/593.1 million, which is recorded in Share of the profit and loss obtained from associates and joint ventures under the equity method of accounting. As of December 31, 2019, we impaired the remaining amount of our investment in GSP, which is recorded in Investments in associates and joint ventures. In 2019, we also recognized an impairment of US$81.5 million (S/276 million) and adjusted the net present value of the account by US$17 million (S/58 million) pursuant to IFRS rules, which are recorded in Long-term account receivables; and wrote off US$54 million (S/180 million) on the deferred income tax asset associated with the company’s investment in GSP, which is recorded in Other non-current assets.

(2) Calculated based on an exchange rate of S/3.317 to US$1.00 as of December 31, 2019.

(3) As of December 31, 2019, includes reserved funds in the amount of S/552.4 million (US$166.5 million), which funds are held in trusts for purposes of the group’s engineering and construction, real estate and infrastructure projects and certain of the group’s outstanding bonds. For more information, see note 9 to our audited annual consolidated financial statements included in this annual report.

(4) Includes investments for the purchase of land by our Real Estate segment. These investments in land are recorded at acquisition cost and are not marked-to-market for changes in fair value. See note 14 to our audited annual consolidated financial statements included in this annual report.

(5) Includes payments required to be made by the Peruvian government for the amounts we invest to purchase trains and other infrastructure for the Lima Metro. See “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Results of Operations—General—Infrastructure” and note 11 to our audited annual consolidated financial statements included in this annual report.

(6) We recognize our investments in the construction of the highway of our Norvial concession as intangible assets. See note 17 to our audited annual consolidated financial statements included in this annual report.

(7) Includes S/607.1 million, S/810.8 million, S/726.3 million, S/496.5 million and S/307.8 million in advance payments made by our clients as of December 31, 2015, 2016, 2017, 2018 and 2019, respectively, in connection with our E&C segment and the operation and maintenance of infrastructure assets contracts. See “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Results of Operations—General—Engineering and Construction” and note 21 to our audited annual consolidated financial statements included in this annual report.

8

	As of and for the year ended December 31,
	2015			2016(1)			2017 Restated			2018			2019(1)			2019(1)
	(in millions of S/)															(in millions of US$)(2)
Other Data:
EBITDA(3) (in millions of S/ or US$)		538.4			(240.5	)		572.3			695.9			(159.0	)		(47.9	)
Gross margin		6.0	%		7.6	%		12.5	%		17.8	%		10.8	%		—
EBITDA margin(4)		9.7	%		(5.8	)%		14.3	%		14.3	%		(3.9	)%		—
Outstanding shares (thousands)		660,054			660,054			660,054			729,434			871,918			—
Profit (loss) per share (in S/or US$)		0.08			(0.68	)		0.31			(0.08	)		(1.02	)		(0.31	)
Profit (loss) attributable to controlling interest per share (in S/or US$)		0.01			(0.77	)		0.23			(0.13	)		(1.08	)		(0.32	)
Dividend per share (in S/or US$)(5)		0.05			—			—			—			—			—
Net debt(6)/ EBITDA ratio		3.8x			(12.1x	)		3.6x			1.9x			(4.8x	)		—
Backlog (in millions of US$) (Unaudited)(7)		3,918.4			3,011.6			2,388.4			1,257.2			1,396.4			—
Backlog/revenues ratio (Unaudited)(7)		1.9x			1.8x			1.3x			1.1x			1.2x			—

(1) For the effects on our results of operations and backlog for 2016 and 2019 resulting from the termination of the GSP gas pipeline concession, see “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Recent Developments (2017—2020)—Termination of the Gasoducto Sur Peruano Concession” and notes 5(e) and 15 to our audited annual consolidated financial statements included in this annual report.

(2) Calculated based on an exchange rate of S/3.317 to US$1.00 as of December 31, 2019.

(3) For further information on the definition of EBITDA, see “—Non-GAAP Financial Measure and Reconciliation.”

(4) Reflects EBITDA as a percentage of revenues.

(5) Payment of dividends for the year’s profit.

(6) Net debt is calculated as total borrowings (including current and non-current borrowings) less cash and cash equivalents. Cash and cash equivalents include the reserved funds; see note 9 to our audited annual consolidated financial statements included in this annual report.

(7) For further information on our backlog, see “Item 4.B. Business Overview—Backlog.” Does not include, in our Infrastructure segment, our Norvial toll road concession and our Energy line of business. Backlog is calculated as of the last day of the applicable year. Revenues are calculated for that year and converted into U.S. dollars based on the exchange rate published by the SBS on December 31 of the corresponding year, which was S/3.413 to US$1.00 as of December 31, 2015, S/3.36 to US$1.00 as of December 31, 2016, S/3.245 to US$1.00 as of December 31, 2017, S/3.379 to US$1.00 as of December 31, 2018 and S/3.317 as of December 31, 2019. Includes revenues only for businesses included in our backlog.

The following tables set forth summary financial data for each of our business segments. For more information on the results of operations of our segments, see “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Results of Operations” and note 7 to our audited annual consolidated financial statements included in this annual report. The effects of the termination of the GSP gas pipeline concession on our results of operations and financial condition for 2016 and 2019 are reflected in Corporate (the Parent Company Operations) and, with respect to CCDS, in our E&C segment.

Beginning on April 1, 2017, we transferred Concar from our former Technical Services segment to our Infrastructure segment. For ease of comparison, the historical segment financial information included in this annual report presents Concar in the Infrastructure segment. This change does not impact our consolidated financial results.

1. Engineering & Construction

	For the year ended December 31,
	2015			2016			2017			2018			2019			2019
	(in millions of S/)															(in millions of US$)(1)
Income Statement Data:
Revenues		4,352.7			2,936.8			2,331.9			1,960.9			2,797.3			843.3
Cost of sales		(4,244.4	)		(2,876.6	)		(2,155.4	)		(1,898.8	)		(2,699.0	)		(813.7	)
Gross profit		108.3			60.2			176.5			62.1			98.4			29.7
Administrative expenses		(243.6	)		(212.0	)		(188.2	)		(136.1	)		(141.4	)		(42.6	)
Other income and (expenses), net		6.4			(14.2	)		(46.5	)		(13.5	)		9.9			3.0
Other (losses) gains, net		(0.2	)		—			—			—			—			—
Operating profit (loss)		(129.2	)		(166.1	)		(58.1	)		(87.5	)		(33.1	)		(10.0	)
Financial (expense) income, net		(96.8	)		(50.8	)		(38.2	)		(67.7	)		(68.5	)		(20.7	)
Share of the profit or loss in associates under the equity method of accounting		15.0			16.5			31.0			11.4			(3.6	)		(1.1	)
Profit (loss) before income tax		(210.9	)		(200.4	)		(65.3	)		(143.9	)		(105.2	)		(31.7	)
Income tax		(15.2	)		19.7			0.9			14.4			(35.5	)		(10.7	)
Profit from discontinued operations		104.2			87.2			76.8			44.1			—			—
Net profit (loss)		(121.8	)		(93.4	)		12.4			(85.4	)		(140.7	)		(42.4	)
Net profit attributable to controlling interest		(131.2	)		(87.2	)		12.1			(86.9	)		(137.1	)		(41.3	)
Net profit (loss) attributable to non-controlling interest		9.3			(5.7	)		0.3			1.5			(3.6	)		(1.1	)

9

2. Infrastructure

	For the year ended December 31,
	2015			2016			2017			2018			2019			2019
	(in millions of S/)															(in millions of US$)(1)
Income Statement Data:
Revenues		1,353.1			1,174.8			1,447.9			1,883.3			1,587.3			478.5
Cost of sales		(1,107.2	)		(963.4	)		(1,187.8	)		(1,532.6	)		(1,262.9	)		(380.7	)
Gross profit		245.9			211.4			260.2			350.6			324.4			97.8
Administrative expenses		(67.0	)		(66.1	)		(63.9	)		(68.8	)		(71.2	)		(21.5	)
Other income and (expenses), net		2.0			1.3			5.8			1.4			50.0			15.1
Other (losses) gains, net		(0.1	)		(0.5	)		0.4			—			—			—
Operating profit		180.8			146.1			202.5			283.0			203.1			61.2
Financial (expense) income, net		(22.9	)		(9.6	)		(19.5	)		(20.1	)		(13.2	)		(4.0	)
Share of the profit or loss in associates under the equity method of accounting		0.9			1.6			1.6			1.6			2.3			0.7
Profit before income tax		158.9			138.1			184.5			264.6			192.2			58.0
Income tax		(46.5	)		(39.9	)		(55.2	)		(80.5	)		(80.2	)		(24.2	)
Net profit		112.4			98.3			129.3			184.0			112.1			33.8
Net profit attributable to controlling interest		93.0			74.4			103.8			152.3			81.3			24.5
Net profit (loss) attributable to non-controlling interest		19.4			23.8			25.5			31.8			30.8			9.3

3. Real Estate

	For the year ended December 31,
	2015			2016			2017			2018			2019			2019
	(in millions of S/)															(in millions of US$)(1)
Income Statement Data:
Revenues		215.8			411.5			647.5			630.1			264.4			79.7
Cost of sales		(164.0	)		(275.0	)		(500.2	)		(342.2	)		(193.6	)		(58.4	)
Gross profit		51.8			136.5			147.4			288.0			70.8			21.3
Administrative expenses		(20.5	)		(28.4	)		(21.2	)		(50.7	)		(22.0	)		(6.7	)

10

	For the year ended December 31,
	2015			2016			2017			2018			2019			2019
	(in millions of S/)															(in millions of US$)(1)
Other income and (expenses), net		1.8			0.8			(3.7	)		(2.0	)		20.0			6.0
Other (losses) gains, net		—			—			49.0			—			—			—
Profit from the sale of investments		—			—			—			—			—			—
Operating profit		33.0			108.9			171.5			235.3			68.8			20.7
Financial (expense) income, net		(10.9	)		(11.6	)		(18.3	)		(8.3	)		(38.5	)		(11.6	)
Share of the profit or loss in associates under the equity method of accounting		14.9			6.8			0.5			—			0.5			0.1
Profit before income tax		37.0			104.2			153.6			226.9			30.7			9.3
Income tax		(7.6	)		(27.1	)		(35.9	)		(69.2	)		(7.0	)		(2.1	)
Net profit		29.3			77.2			117.7			157.8			23.7			7.2
Net profit attributable to controlling interest(4)		12.4			22.1			48.6			28.9			(5.0	)		(1.5	)
Net profit (loss) attributable to non-controlling interest(2)		17.0			55.1			69.1			128.9			28.7			8.7

(1) Calculated based on an exchange rate of S/3.317 to US$1.00 as of December 31, 2019.

(2) The net profit attributable to controlling interests of our Real Estate segment is significantly affected by the financing and commercial arrangements we use to purchase land and to develop real estate projects. Depending on the level of non-controlling interests used to finance our real estate projects, our Real Estate segment tends to have significant net profit attributable to non-controlling interests. See “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Results of Operations—General—Real Estate.”

Non-GAAP Financial Measure and Reconciliation

In this annual report, we present EBITDA, a non-GAAP financial measure. A non-GAAP financial measure is generally defined as one that purports to measure financial performance, financial position or cash flows but excludes or includes amounts that would not be so adjusted in the most comparable IFRS measure. We define EBITDA as net profit plus: financial (expense) income, net; income tax; and depreciation and amortization.

We present EBITDA because we believe it provides readers with a supplemental measure of the financial performance of our core operations that facilitates period-to-period comparisons on a consistent basis. Our management uses EBITDA, among other measures, for internal planning and performance measurement purposes. We believe that EBITDA is useful in evaluating our operating performance compared to that of other companies operating in our sectors because EBITDA eliminates the effects of financing and income taxes and the accounting effects of capital spending, which items may vary for different companies for reasons unrelated to overall operating performance. EBITDA should not be construed as an alternative to net profit or operating profit, as an indicator of operating performance, as an alternative to cash flow provided by operating activities or as a measure of liquidity (in each case, as determined in accordance with IFRS). EBITDA, as calculated by us, may not be comparable to similarly titled measures reported by other companies. The following table sets forth the reconciliation of our net profit to EBITDA on a consolidated basis.

	For the year ended December 31,
	2015			2016			2017 Restated			2018			2019			2019
	(in millions of S/)															(in millions of US$)(1)
Net profit (loss)		55.6			(451.6	)		209.2			57.4			(838.6	)		(252.8	)
Financial expense		518.6			942.5			473.9			630.1			621.7			187.4
Financial income		(420.9	)		(762.7	)		(336.8	)		(433.0	)		(464.7	)		(140.1	)
Income tax		78.7			(152.2	)		46.3			113.3			320.0			96.5
Depreciation and amortization		306.4			183.4			179.7			189.5			202.6			61.1
EBITDA		538.4			(240.5	)		572.3			557.3			(159.0	)		47.9

11

(1) Calculated based on an exchange rate of S/3.317 to US$1.00 as of December 1, 2019.

The following table shows a reconciliation of the EBITDA for our three segments, Parent company operations and intercompany eliminations:

	For the year ended December 31,
	2015			2016			2017 Restated			2018			2019			2019
	(in millions of S/)															(in millions of US$)(1)
Engineering and construction		231.3			19.3			120.0			19.2			2.9			0.9
Infrastructure		272.2			237.1			300.9			411.5			355.5			107.2
Real estate		52.8			121.4			177.3			241.0			76.2			23.0
Parent company operations		(34.1	)		(1,025.2	)		125.9			(27.8	)		(1,077.3	)		(324.8	)
Intercompany eliminations		16.2			406.2			(151.8	)		(86.6	)		483.7			145.8
EBITDA		538.4			240.5			572.3			557.3			(159.0	)		(47.9	)

(1) Calculated based on an exchange rate of S/3.317 to US$1.00 as of December 31, 2019.

The following tables set forth the reconciliation of our net profit to EBITDA for each of our business segments and certain of our lines of business or subsidiaries within these segments. The effects of the termination of the GSP gas pipeline concession on our results of operations and financial condition for 2016 are reflected in Corporate (the Parent Company Operations) and, with respect to the related construction consortium (CCDS), in our E&C segment. Beginning on April 1, 2017, we transferred Concar from our Technical Services segment to our former Infrastructure segment. This change does not impact our consolidated financial results. For more information, see note 7 to our audited annual consolidated financial statements included in this annual report.

1. Engineering & Construction

	For the year ended December 31,
	2015			2016			2017			2018			2019			2019
	(in millions of S/)															(in millions of US$)(1)
Net profit (loss)		(48.8	)		(93.5	)		12.4			(85.4	)		(140.7	)		(42.4	)
Financial expense		375.8			555.8			212.3			284.7			252.2			76.0
Financial income		(279.0	)		(505.0	)		(174.1	)		(217.0	)		(183.7	)		(55.4	)
Income tax		15.2			(19.7	)		(0.9	)		(14.4	)		35.5			10.7
Depreciation and amortization		168.1			81.6			70.3			51.3			39.6			11.9
EBITDA		231.3			19.3			120.0			19.2			2.9			0.9

12

2. Infrastructure

2.1 Full Segment

	For the year ended December 31,
	2015			2016			2017			2018			2019			2019
	(in millions of S/)															(in millions of US$)
Net profit		112.4			98.3			129.7			184.0			112.1			38.8
Financial expense		78.2			101.7			62.6			143.1			127.0			38.3
Financial income		(55.3	)		(92.0	)		(43.1	)		(123.1	)		(113.8	)		34.3
Income tax		46.5			39.9			55.2			80.5			80.2			24.3
Depreciation and amortization		90.5			90.0			96.9			126.8			150.0			45.2
EBITDA		272.3			237.8			300.9			411.5			355.5			107.2

2.2 All Toll Roads

	For the year ended December 31,
	2015			2016			2017			2018			2019			2019
	(in millions of S/)															(in millions of US$)
Net profit		53.5			44.9			55.0			29.2			(0.8	)		(0.2	)
Financial expense		10.8			14.9			7.7			28.6			34.8			10.5
Financial income		(14.8	)		(9.6	)		(3.5	)		(7.2	)		(10.3	)		(3.1	)
Income tax		18.8			15.5			20.9			8.8			6.9			2.1
Depreciation and amortization		10.9			11.1			11.0			42.9			46.6			14.0
EBITDA		79.2			76.8			91.1			102.3			77.4			23.3

2.3 Mass Transit

	For the year ended December 31,
	2015			2016			2017			2018			2019			2019
	(in millions of S/)															(in millions of US$)(1)
Net profit		18.8			23.9			19.5			87.1			81.4			24.5
Financial expense		7.9			20.5			18.4			72.5			43.6			13.1
Financial income		(4.9	)		(25.8	)		(14.0	)		(87.0	)		(65.9	)		(19.9	)
Income tax		8.1			10.9			9.5			38.0			39.6			11.9
Depreciation and amortization		0.1			0.1			0.1			0.2			0.3			0.1
EBITDA		30.0			29.6			33.5			110.8			99.2			29.9

2.4 Energy

	For the year ended December 31,
	2015			2016			2017			2018			2019			2019
	(in millions of S/)															(in millions of US$)(1)
Net profit		20.2			12.0			38.1			65.0			52.8			15.9
Financial expense		50.3			61.7			34.8			37.9			46.1			13.9
Financial income		(30.5	)		(52.0	)		(23.3	)		(26.9	)		(34.9	)		(10.5	)
Income tax		7.7			5.3			13.2			26.3			22.9			6.9
Depreciation and amortization		74.2			72.5			79.4			76.6			93.8			28.3
EBITDA		121.8			99.5			142.1			178.9			180.8			45.5

3. Real Estate

	For the year ended December 31,
	2015			2016			2017			2018			2019			2019
	(in millions of S/)															(in millions of US$)(1)
Net profit		29.3			77.2			117.7			157.8			23.74			7.1
Financial expense		47.7			65.1			36.0			25.2			58.8			17.7
Financial income		(36.8	)		(53.5	)		(17.7	)		(16.9	)		(20.3	)		(6.1	)

13

	For the year ended December 31,
	2015		2016		2017		2018		2019		2019
	(in millions of S/)										(in millions of US$)(1)
Income tax		7.6		27.1		35.9		69.2		7.0		2.1
Depreciation and amortization		4.9		5.6		5.3		5.7		7.0		2.1
EBITDA		52.8		121.4		177.3		241.0		76.2		23.0

(1) Calculated based on an exchange rate of S/3.317 to US$1.00 as of December 31, 2019.

(2) Our E&C segment EBITDA includes S/15.0 million, S/16.5 million, S/31.0 million, S/11.4 million and S/3.8 million in 2015, 2016, 2017, 2018 and 2019, respectively, which represents GyM’s 43.3% equity interest in Viva GyM’s net profit.

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

Risks Related to Recent Developments (2017—2020)

The ongoing COVID-19 pandemic and government measures to contain the spread of the virus are disrupting economic activity in the countries where we operate and adversely affecting our business, results of operations and financial condition.

The recent outbreak of the Novel Coronavirus 2019 (COVID-19) pandemic, which has been declared by the World Health Organization to be a “public health emergency of international concern,” has spread across the world since the end of 2019. The virus has spread significantly in Latin America to date, and we cannot assure you that the virus will not spread more widely in the region. In such event, the countries where we operate are likely to have less resources to address the health care effects of the pandemic. In response, countries around the world—including Peru as well as Chile and Colombia—have adopted extraordinary measures to contain the spread of COVID-19, including imposing travel restrictions, requiring closures of non-essential businesses, establishing restrictions on public gatherings, instructing residents to practice social distancing, issuing stay-at-home orders, implementing quarantines and similar actions. Depending on how the spread of the virus continues to evolve, governments may extend these measures for longer periods.

The COVID-19 pandemic and these government measures have significantly increased economic uncertainty and are likely to cause a global recession. Moreover, the impact of the pandemic on economic activity has been sudden and severe, and we cannot predict the extent to which economies in the countries where we operate will ultimately be impacted. Even if the initial outbreaks of COVID-19 subside, we cannot predict whether subsequent outbreaks will reoccur, or whether governments will implement longer-term measures that continue to affect economic activity and capital investment levels. As a result, the negative impact of COVID-19 may continue well beyond the containment of the virus. In response to the sudden decline in economic activity, governments around the world, including in Latin America, have announced large stimulus programs to assist families and businesses. However, we cannot assure you that these programs will be sufficient to reactivate economy activity; moreover, the governments in the countries where we operate are likely to have less resources to stimulate their local economies.

The COVID-19 pandemic is significantly and adversely affecting our business, results of operations and financial condition. From mid-March through the end of May 2020, substantially all of our engineering and construction and real estate projects were mandatorily shut down. Although certain projects are gradually resuming, we cannot assure you when we will be able to resume work on our projects in full. Our infrastructure operations, which have for the most part been declared essential businesses, have continued; however, certain of our infrastructure businesses have been adversely affected, in particular, by the sharp decline in traffic volumes and oil and gas prices (also due to the

14

dispute in March among OPEC member countries). Our results and operations of the first quarter of 2020 were adversely impacted by the pandemic. We expect that our results of operations for the second quarter of 2020 will be significatively more impacted, as adverse conditions have persisted for a longer period during the second quarter. We are evaluating measures to reduce our expenses and preserve liquidity. However, depending on how long current conditions persist and unless we are able to benefit from government stimulus programs, the pandemic is likely to have a material adverse effect on our business, results of operation and financial condition.

Our reputation has been adversely affected by our association with Odebrecht’s affiliates in Peru

We participated in six construction and operation of infrastructure projects in Peru with affiliates of Odebrecht during the period from 2005 to 2017. Our reputation has been adversely affected as a result of the plea agreements and criminal convictions of Odebrecht and certain key persons related to Odebrecht in connection with corruption, money laundering and criminal organization. Peruvian authorities have initiated criminal investigations into the dealings of Odebrecht’s affiliates in Peru, the scope of which include certain consortia in which we participated. Moreover, as a result, our company and certain of our former directors and senior management are the subject of criminal investigations relating to corruption allegations. These investigations are ongoing.

In January 2019, Odebrecht executed a settlement and cooperation agreement with the Peruvian government regarding several infrastructure projects in the country, including certain projects in which we participated. Under the agreement, Odebrecht has agreed to pay compensation to the Peruvian government over the course of several years and to cooperate with, and provide evidence to, prosecutors in connection with ongoing investigations by the Peruvian government. Former senior officers of Odebrecht’s affiliate in Peru have indicated to Peruvian prosecutors that certain of our former directors and senior management were aware that Odebrecht had made corrupt payments to government officials in connection with certain projects in which we participated.

In December 2019, we entered into a preliminary settlement and cooperation agreement with the Peruvian anticorruption prosecutor and the ad hoc Peruvian state counsel in respect of investigations relating to past projects in which the company participated with Odebrecht and investigations relating to an alleged participation in the “construction club”. The terms of the preliminary settlement and cooperation agreement are confidential in accordance with Peruvian law and under discussion with Peruvian authorities.

Our reputation is a key factor in our clients’ evaluation of whether to engage our services, key industry players’ willingness to partner with us, financial institutions’ willingness to provide us credit, and recruiting and retaining talented personnel to our company. The impact on our business reputation related to our association with Odebrecht and the alleged actions of our former board members and senior management has had, and is likely to continue to have, a material adverse effect on our business, financial condition and results of operations. The outcome of the ongoing investigations and settlement discussions, any new charges or news reports containing new allegations against the company, or other similar developments, could further damage the reputation of the company.

Investigations regarding potential corruption or other illegal acts could have a material adverse effect on our business, financial condition and results of operations

Our company and certain of our subsidiaries, and certain of our former directors and senior management, have been charged in connection with criminal and civil investigations relating to certain of our projects in connection with our association with Odebrecht and in connection with our alleged participation in what is referred to as the “construction club.”

In connection with investigations relating to the IIRSA South project concession (tranche II), the Peruvian criminal prosecutor moved to charge our company and our construction subsidiary, GyM, as criminal defendants in connection with the project. In response, the Peruvian First National Preparatory Investigation Court (Primer Juzgado de Investigación Preparatoria Nacional) notified us of its decision to formally include our company and GyM in its criminal investigation. We appealed the court’s decision and, in June 2018, the First Court of Appeals of the Superior Court of Lima revoked the judicial order that indicted our company and GyM, among other corporate defendants, in the criminal investigation on charges of collusion and other crimes and rejected the petition, without prejudice, made by the prosecutor to incorporate both companies in the aforementioned process. Nevertheless, in February of 2020, we were notified that the criminal prosecutor had filed a new motion to bring criminal charges against our company and GyM in connection with the IIRSA South project concession (tranche II). We cannot predict the outcome of this motion.

15

Separately, in connection with these investigations, in December 2018, the Peruvian First National Preparatory Investigation Court resolved to include our company and GyM as civilly-responsible third parties in the investigations related to the IIRSA South project concession (tranche II) and GyM as a civilly-responsible third party in the investigations related to Tranches 1 and 2 of the Lima Metro. These proceedings are ongoing.

Peruvian prosecutors have included José Graña Miró Quesada, a shareholder and the former Chairman of our company, in an investigation for the crime of collusion, and Hernando Graña Acuña, a shareholder, a former board member of our company and former chairman of our subsidiary GyM, for the crime of money laundering against the Peruvian government, each in connection with the IIRSA South project concession (tranche II), in which we participated with Odebrecht. Gonzalo Ferraro Rey, the former Chief Infrastructure Officer of our company, has also been included in an investigation for the crime of money laundering in connection with the same project. In addition, José Graña Hernando Graña, as well as Juan Manuel Lambarri, the former chief executive officer of our subsidiary GyM, have been charged in connection with Tranches 1 and 2 of the Lima Metro project. In August 2019, José Graña indicated in public statements to the media that he and Hernando Graña had initiated a process of plea bargaining with Peruvian prosecutors in respect of multiple projects in which our company participated with Odebrecht and in respect of the alleged “construction club.” According to José Graña’s public statements, in the plea bargaining process, both he and Hernando Graña are cooperating with the Peruvian prosecutor, which may include providing information related to wrongdoing or knowledge of improper behavior while they were at the company. However, given the confidential nature of these proceedings, the reported information is limited and difficult to verify. We cannot assure you what they will ultimately say to the government, or that their statements will not adversely affect the company’s business.

A conviction of corruption or settlements with government authorities could lead to criminal and civil fines as well as penalties, sanctions, injunctions against future conduct, profit disgorgement, disqualifications from directly and indirectly engaging in certain types of business, the loss of business licenses or permits, debarment from contracting or from participating in bidding processes with the Peruvian government, or other restrictions. Moreover, our alleged involvement in corruption investigations, and any findings or admissions of wrongdoing in such investigations, could further damage our reputation and have a material adverse impact on our ability to compete for business. In addition, such investigations may affect the company’s ability to secure financing in the future. Furthermore, investigations could continue to divert management’s attention and resources from other issues facing our business.

In May 2018, Peruvian Supreme Decree No. 096-2018-EF set forth guidelines to determine the value of assets to be put in trust to guarantee eventual compensation to the Peruvian government that is required for companies that have been partners of companies that have been, or whose officers or representatives have been, convicted of, or have admitted to, corruption, money-laundering or similar crimes, which includes our company and our subsidiary GyM. Following discussions with the Peruvian government, in February 2019, we established a trust in favor of the Peruvian government in respect of any liabilities arising from Tranches 1 and 2 of the Lima Metro project and Tranche II of the IIRSA project, to which we assigned shares of our subsidiary GMI, which is estimated to be worth approximately US$23.4 million (S/79.1 million). We cannot assure you that the Peruvian government will not claim the assets set forth in this trust or require that our company place additional assets in trust, nor can we assure you that these assets will fully satisfy any eventual obligations we may have to the Peruvian government.

Management has estimated the value of the company’s contingencies to be approximately US$84.4 million (S/279.8 million), and taking into account the net present value, established a provision in the company’s financial statements in the amount of US$46.6 million (S/153.9 million). This includes amounts in respect of probable liabilities arising from the investigations of Tranche II of the IIRSA project, Tranches 1 and 2 of the Lima Metro project, the GSP project and the “construction club” investigation (described below). We cannot provide assurance that our liability will not exceed the amount estimated by management and provisioned for in the financial statements of the company. Furthermore, if the company is further charged in connection with wrongdoing in respect of other projects, this contingent amount could increase significantly.

16

We cannot assure you that the scope of the foregoing proceedings will not be expanded to incorporate other projects in which we have been involved, that our company will not be included in other investigations or proceedings as a criminal defendant or civilly-responsible third party in Peru or elsewhere, or that other of our former or current directors and senior management will not be included in the foregoing proceedings. We continue to evaluate alternatives to resolving ongoing investigations against our company and our subsidiary GyM, including the negotiation of a settlement and cooperation agreement with Peruvian authorities. However, we cannot assure you that these investigations will be resolved in a manner that is favorable to our company.

INDECOPI and Peruvian prosecutors have initiated investigations alleging that certain construction companies in Peru, including our company, colluded to receive public contracts

The Peruvian National Institute for the Defense of Free Competition and the Protection of Intellectual Property (“INDECOPI”) initiated in 2017 investigations regarding allegations that certain construction companies in Peru, including our subsidiary GyM, colluded as a “construction club” to receive public contracts. In February 2020, INDECOPI initiated an administrative proceeding against several construction companies, including our subsidiary GyM, aiming to impose civil fines on the investigated companies.

Separately, in December 2018, GyM was formally included as a civilly-responsible third party, along with eleven other construction companies, in the criminal investigation conducted by a Peruvian public prosecutor based on facts similar to those under investigation by INDECOPI. In December 2019, the prosecutor criminally charged GyM and another of our subsidiaries, CONCAR, and other companies in the construction sector in Peru, as well as a former director and senior management of our company, with collusion and other alleged crimes. As described above, the company’s management has made estimates, and established provisions, in the company’s audited consolidated financial statements for the investigations in respect of the company and its subsidiaries, including in respect of the company’s alleged participation in what is referred to as the “construction club”. We cannot provide assurance that our liability will not exceed the amount estimated by management and provisioned for in the financial statements of GyM and CONCAR. Furthermore, if GyM, CONCAR or any other subsidiary of the company is further charged in connection with wrongdoing in respect of other projects, this contingent amount could increase significantly.

We cannot assure you that any of our company’s other current or former directors or senior management will not be included in these investigations or proceedings in the future, nor can we predict the outcome of any such investigations or proceedings, the timing thereof or how they may impact our business, financial condition and results of operations. We also cannot predict whether prosecutors or INDECOPI will bring additional investigations or proceedings in the future. We continue to evaluate alternatives to resolving ongoing investigations against our subsidiaries GyM and CONCAR, including the negotiation of a settlement and cooperation agreement with Peruvian authorities. However, we cannot assure you that these investigations will be resolved in a manner that is favorable to our company.

A conviction of corruption or settlements with government authorities could lead to criminal and civil fines as well as penalties, sanctions, injunctions against future conduct, profit disgorgement, disqualifications from directly and indirectly engaging in certain types of business, the loss of business licenses or permits, debarment from contracting or from participating in bidding processes with the Peruvian government, or other restrictions.

We are currently negotiating a settlement and cooperation agreement with Peruvian authorities in connection with the criminal investigations against our company

In December 2019, we entered into a preliminary settlement and cooperation agreement with the Peruvian anticorruption prosecutor and the ad hoc Peruvian state counsel in respect of investigations relating to past projects in which the company participated with Odebrecht and investigations relating to an alleged participation in the “construction club”. The terms of the preliminary settlement and cooperation agreement are confidential in accordance with Peruvian law and under discussion with Peruvian authorities.

Although in the preliminary settlement and cooperation agreement, the Peruvian government undertook to enter into a final settlement and cooperation agreement within sixty business days, we have not reached a final agreement, and the parties continue to discuss the terms of the settlement. Although we expect to reach a final

17

agreement with the government, we cannot guarantee that the government will execute the agreement within a reasonable time frame or at all, nor can we guarantee that any final settlement and cooperation agreement will be executed on terms favorable to the company. In particular, we cannot provide assurances that the government will not require compensation in an amount materially greater than the amount we have estimated and provisioned; that our company will be able to pay any compensation required pursuant to the terms of any final settlement and cooperation agreement; or a final settlement and cooperation agreement will not contain measures that restrict the company’s business in the future, including limitations on the company’s ability enter into contracts with the Peruvian government. We also cannot guarantee what impact any settlement and cooperation agreement, which may require admission of wrongdoing, will have on our reputation.

A class action civil lawsuit in the United States may adversely affect our company

A class action civil lawsuit was filed in 2017 against our company and certain of our former directors and former and current executive officers in the United States. In February 2020, we executed a term sheet with the plaintiffs that provides the general terms and conditions for a final settlement agreement. The term sheet stipulates a settlement amount of US$20 million plus interest after a certain time period. The company recorded provisions of US$15 million as of December 31, 2019, and the remaining US$5 million is expected to be covered by the company’s D&O insurance. It is not certain whether the negotiation of a final settlement agreement will be successful, and if so, whether any such agreement will be approved by the court. In such case, we would expect the lawsuit to resume.

If the lawsuit continues to be litigated, we cannot assure you that our position will prevail. If our position does not prevail, the lawsuit may have a material adverse effect on our business, financial condition and results of operations.

There is substantial uncertainty with regard to the amount, timing and manner in which the payment for the termination of the GSP gas pipeline concession will be paid

There is substantial uncertainty with regards to the payment contemplated under the GSP gas pipeline concession contract as a result of the termination of the gas pipeline concession, including with respect to the amount, timing and manner in which the payment will be made, or if it will be made at all.

Although the concession contract provides that payment must be made within one year of termination, the Peruvian Ministry of Energy and Mines has not made payment or, to our knowledge, initiated the payment process or the auction process for a new concessionaire. As a result, after the six-month period mandated by the concession contract for the parties to discuss the matter, in October 2019, we asserted our rights against the Peruvian government by filing a request for arbitration before the International Centre for Settlement of Investment Disputes. However, in December 2019 we withdrew our request for arbitration, as required by Peruvian authorities under the preliminary settlement and cooperation agreement we entered into with Peruvian anticorruption prosecutor and the ad hoc Peruvian state counsel.

As of the date of this annual report, we are analyzing available contractual and legal options to recover as a creditor of GSP. However, we cannot guarantee that any of these options will be successful, or that we will be able to recover all or any of the amounts owed to the company as a result of the termination of the GSP gas pipline concession on a timely basis, or at all. Failure to receive the expected payment on a timely basis, or at all, would have a material adverse effect on our business, financial condition and results of operations.

We have made certain estimates in our consolidated financial statements with respect to the expected payment for the termination of the GSP contract. As of December 31, 2019, we fully impaired the remaining amount of our investment in GSP. However, we maintain S/544 million (US$164 million) in long-term account receivables as a creditor of GSP.

18

Our inability to provide audited financial statements for GSP in accordance with Rule 3-09 may result in enforcement actions by the SEC or may, among other matters, cause us to be unable to complete a public offering in the United States

We have been unable to provide certain financial statements of GSP that are required by Rule 3-09 to be included in our company’s annual report. Under Rule 3-09, we are required to present or generate financial statements of GSP as of December 31, 2015 and for the period from November 2, 2015 to December 31, 2015, as of and for the year ended December 31, 2016 and as of and for the year ended December 31, 2017, with the financial statements of GSP as of and for the year ended December 31, 2016 audited in accordance with the standards of the Public Company Accounting Oversight Board. It is currently impracticable for our company to comply with this requirement, because the audit opinion that was issued with respect to GSP’s 2016 financial statements included a disclaimer, our company’s loss of significant influence over GSP, and GSP’s limited management as the entity is in insolvency proceedings.

We believe that the information presented by separate financial statements of GSP would not provide to our company’s investors additional material information not already included in our company’s own consolidated financial statements included in this annual report. As a result, we do not believe that the omission of those financial statements will have a material impact on a reader’s understanding of our financial condition or results of operations. Nevertheless, we requested a waiver from the SEC from the requirement to file the consolidated financial statements of GSP described above, and the SEC has not granted our waiver request.

As a result, we are currently not fully compliant with our reporting requirements with the U.S. Securities Exchange Act of 1934 (the “Exchange Act”). The SEC may impose penalties or otherwise take action against our company. In addition, the SEC may not declare effective any registration statement that we file that requires the financial statements under Rule 3-09 to be included. If, as a result, we are unable to complete a registered offering, our ability to access the public capital markets in the United States would be impaired. Furthermore, the Rule 144 safe harbor for certain sales of our ADSs in the United States is currently unavailable.

We were in default under certain of our debt instruments during 2017, 2018 and 2019, and we cannot assure you that we will not be in default under our debt instruments in the future, or that we will be able to obtain additional waiver in the event of any future defaults

In 2019, our subsidiary Adexus entered into Chilean bankruptcy proceedings to restructure its outstanding indebtedness and, as a result, we were in default under our loan agreement with CS Peru Infrastructure Holdings LLC. We received a waiver for the default on February 28, 2020. As a result, this indebtedness of US$35 million was recorded as a current liability as of December 31, 2019, of which US$10 million was repaid at the time of the waiver. Also during 2019, our construction subsidiary GyM was under a continuing default under the Financial Stability Framework Agreement with respect to its failure to comply with certain ratios between Tranche A (client invoices) and Tranche B (client provisions). No event of default was formally notified to GyM by the lenders, and GyM procured a waiver from the lenders in July 2019. In addition, during the years 2017 and 2018 we were in default under certain of our debt instruments, including due to: delays in delivering audited financial statements; defaults with respect to certain financial ratio and other covenants; and delays in paying certain amounts outstanding. We procured waivers from our creditors under such instruments.

We cannot assure you that we will not breach the covenants under these or other of our debt instruments in the future and, in such event, that we would be able to obtain the required waivers from our creditors. Failure to successfully obtain waivers could force us to precipitate the sale of assets, including on unfavorable terms, to repay these debt instruments. Moreover, if we are not able to renegotiate the terms of any debt instruments in which we are in default, or repay them promptly, our ability to obtain financings, including performance guarantees or similar financings required under many of our business contracts, would be impaired, which may have a material adverse effect on our business, financial condition and results of operations.

We may be unable to access financing that we need to operate our business on favorable terms or at all

Due to uncertainty relating to the investigations of our company, our creditors and other banks operating in the Peruvian market have placed restrictions on our ability, and the ability of other construction companies, to acquire future credit lines or other financings. We cannot assure you that we will be able to obtain new financings in the future on favorable terms or at all. We may encounter difficulties in obtaining performance bonds or credit support that we require to secure, among other things, bids, advance payments and performance for our projects.

19

Our ability to obtain financings will also depend in part upon prevailing conditions in credit and capital markets, which are beyond our control. Emerging markets have been affected by changes in the U.S. monetary policy, resulting at times in a withdrawal of investments and increased volatility in the value of their currencies. If interest rates rise significantly in the United States, emerging market economies, including Peru, could find it more difficult and expensive to borrow capital and refinance existing debt. Higher interest rates globally or in Peru would in turn impact our costs of funding.

Currently, volatility and instability due to the ongoing COVID-19 pandemic and government measures to contain the spread of the virus also has, and may continue to, negatively affect the general willingness of lenders to extend credit. At the same time, the COVID-19 pandemic has also put further pressure on our liquidity needs, including for short-term working capital; from mid- March through the end of May, substantially all of our engineering and construction and real estate projects have been mandatorily shut down, and, although work on many of our projects will begin to resume generally, we cannot assure you when we will be able to resume work on our projects in full.

An inability to procure adequate financing or credit on favorable terms or all could have a material adverse effect on our business, financial condition and results of operation.

We may not be able to sell assets on favorable terms or at all

As part of our strategic action plan in response to the termination of the GSP gas pipeline concession, our board of directors approved the sale of certain non-strategic assets, in order to raise funds to make payments in respect of debt related to the termination of the GSP gas pipeline concession. In 2017 and 2018 we undertook multiple divestitures. In addition, we continue marketing for sale our subsidiary Adexus. Moreover we are also evaluating the sale of additional assets, including part of our land bank, which we do not consider to be strategic to our business, to meet our liquidity needs. However, we cannot assure you that we will be able to continue to sell assets on favorable terms or at all. If we are not able to sell assets on a timely basis, our ability to address our liquidity needs may be adversely affected. Conversely, if we sell significant assets, our business and results of operations will be diminished.

We may be subject to takeover transactions, and we cannot assure you that any such transaction, if it were to occur, would be favorable to our shareholders.

We may be increasingly subject to takeover actions, including as a result of uncertainties relating to the ongoing investigations and the effects of the COVID-19 pandemic. In November 2019, IG4 Investimentos Ltda, a Brazilian hedge fund, announced its intention to acquire a significant stake in our company, indicating that it had signed a memorandum of understanding with certain former directors and other shareholders and that it was interested in undertaking a partial public tender offer. Since that announcement, we have received due diligence inquiries from IG4 Investimentos Ltda, which we have responded on the basis of public information. We cannot assure you that IG4 Investimentos Ltda, or any other offeror, will launch (and if launched, consummate) a public tender offer or other acquisition of company securities. If IG4 Investimentos Ltda, or any other offeror, does launch a tender offer or other acquisition transaction, we cannot assure you that the consideration, or other terms and conditions offered to our shareholders pursuant to any tender offer or other acquisition transaction will be favorable to our shareholders. If IG4 Investimentos Ltda, or any other offeror, acquires a significant stake in, or control of, the company, we cannot assure you that the interests of such new controlling or significant shareholders will be aligned with those of the company’s other shareholders.

Risks Related to Our Company

Global economic conditions could adversely affect our financial performance

Global economic conditions, in particular fluctuations in commodity prices and financings costs, may impact our clients’ investment decisions. Should our clients choose to postpone or suspend new investments or delay or cancel the execution of existing projects as a result of global economic conditions, demand for our products and services

20

would decline, which may result in a decline in revenues and in under-utilization of our capacity. Since mid-March of 2020, the ongoing COVID-19 pandemic has disrupted economic activity and is likely to cause a global recession. In addition, our business may be impacted by adverse economic developments even after economic conditions have improved because of the lag time between when investments decisions are made and when the projects are executed. Furthermore, financial difficulties suffered by our clients, joint operation partners, subcontractors or suppliers due to global economic conditions could result in payment delays or defaults, or increase our costs or adversely impact our project execution. Accordingly, a global economic downturn could have a material adverse effect on our financial performance.

We face significant competition in each of our markets

Each of the markets in which we operate is competitive. We compete on the basis of, among other factors, price, performance, product and service quality, skill and execution capability, client relations, reputation and brand, and health, safety and environmental record. We face significant competition from both local and international players. Some of these competitors may have greater resources than us or specialized expertise in certain sectors. In addition, a portion of our business is derived from open bidding processes which can be highly competitive. Certain of our markets are highly fragmented with a large number of companies competing for market share. Our competitors may be more inclined to take greater or unusual risks or accept terms and conditions in a contract that we might not deem acceptable. Moreover, we cannot assure you that we will not face new competition from industry players entering or expanding their operations in our markets. If we are unable to compete effectively, our ability to continue to grow our business or maintain our market share would be affected. In addition, because one of the factors on which we generally compete is price, increased competition could impact our operating margins. Accordingly, our business and financial performance could be adversely affected by competition in our markets.

A major change in government policies could affect our business

Our business is significantly affected by national, regional and municipal government policies and regulations in the countries where we operate, including with respect to infrastructure concessions or similar contracts to the private sector, public spending in infrastructure investment and government housing subsidies, among others. Any adverse change in government policies with respect to these matters could result in a material adverse effect on our business and financial performance. Recently, as a result of the ongoing COVID-19 pandemic, the Peruvian government has recently temporarily shut down substantially all construction activity. Additionally, the Peruvian Congress has suspended the payment of tolls on roads during the period of quarantine.

Social conflicts may disrupt infrastructure projects

Despite Peru’s ongoing economic growth and stabilization, high levels of poverty and unemployment and social and political tensions continue to be pervasive problems in the country. Peru has, from time to time, experienced social and political turmoil, including riots, nationwide protests, strikes and street demonstrations. In recent years, certain regions experienced strikes and protests related mainly to the environmental impact of mining activities, which resulted in commercial disruptions. These protests may lead to the suspension of mining projects. Social conflicts may disrupt, delay or suspend infrastructure projects in the future, which could have a material adverse effect on our business and financial performance.

In addition, beginning in October 2019, Chile has suffered from widespread social unrest and vandalism that has had a significant economic and political impact on the country. As a result, the Chilean congress convened a plebiscite initially to be held in March 2020 to determine whether constitutional amendments should be implemented. The vote has been postponed to October 2020 as a result of the COVID-19 pandemic. This process may result in further social unrest and protest and could also result in substantial structural changes in Chile that could adversely impact the private sector, including our operations in the country.

Additionally, beginning in November 2019, Colombia has experienced civic unrest in the form of a national strike and anti-government protests. As such, our Colombian operations could be adversely impacted by changing economic, political and social conditions in Colombia and by the Colombian government’s response to such conditions.

21

New projects may require the prior approval of local indigenous communities

Peruvian Law No. 29,785, regarding the Prior Consultation Right of Local Indigenous Communities, which was enacted in accordance with the International Labor Organization Convention No. 169 (Ley del Derecho a la Consulta Previa a los Pueblos Indígenas y Originarios, Reconocido en el Convenio 169 de la Organización Internacional del Trabajo), establishes a prior non-binding consultation procedure (procedimiento de consulta previa). Under this law the Peruvian government must carry out consultation procedures with local indigenous communities, whose rights may be directly affected by new legislative or administrative measures, including the granting of certain permits or new concessions or similar contracts, such as for mining, energy and oil and gas projects. Local indigenous communities do not have a veto right; and therefore, upon completion of this prior consultation procedure, the Peruvian government retains the discretion to approve or reject the applicable legislative or administrative measure. However, we cannot assure you that these consultation procedures will not negatively influence a decision by Peruvian government to grant us a permit, concession or consent and, therefore, adversely affect new projects and concessions. Accordingly, our business and financial performance may be materially and adversely affected.

Our backlog and our ratio of historical backlog to revenues may not be reliable indicators of future revenues or profit

The amount of our backlog is not necessarily indicative of future revenues or profits related to the performance of the related contracts. Our backlog amount is subject to revision over time and our ability to realize revenues from our backlog is subject to a number of uncertainties. Cancellations, scope adjustments or deferrals may occur, from time to time, with respect to contracts reflected in our backlog and could reduce the amount of our backlog and the revenue and profits that we actually earn. For example, the termination of the GSP gas pipeline concession on January 24, 2017 reduced our backlog as of December 31, 2016 by US$855 million, 30.2% of our E&C backlog and 21.4% of our total backlog as of that date. Contracts may also remain in our backlog for an extended period of time and poor performance could also impact our profit from the contracts in our backlog. In addition, our backlog is expressed in U.S. dollars based on period-end exchange rates while a significant portion of our contracts are payable in soles or other local currencies. As a result, any depreciation of local currency would diminish the amount of revenues eventually earned relative to backlog.

Our backlog may decline in the future. We cannot assure you that we will be able to obtain sufficient contracts in the future in number and magnitude to increase our backlog. Additionally, the amount of new contracts that we obtain can fluctuate significantly from period to period due to factors that are beyond our control.

Moreover, the ratio of our historical backlog to revenues earned in subsequent years is volatile and substantially affected by a number of factors, some of which are outside our control, including levels of contract scope adjustments and our ability to enter into new contracts (which are substantially influenced by general macroeconomic conditions), delays and cancellations, foreign exchange rate movements and our ability to increase the scale of our operations to expand the amount of work we carry out beyond that previously contracted. Accordingly, historical correlations between backlog and revenues may not recur in future periods.

Our success depends on key personnel

Our success depends, to a significant degree, upon the services of our senior management, board of directors and other key personnel. Members of our management team are not subject to non-competition agreements with us. We cannot assure you that we will be successful in retaining our current senior management or members of our board of directors, nor can we assure you that, in such event, we would be able to find suitable replacements. In addition, the success of our business depends on our ongoing ability to attract, train and retain qualified engineers and other personnel. In recent years, the availability in Peru of qualified personnel who have the necessary expertise and experience has been lower than demand and, therefore, competition for human resources has become intense. We cannot assure that we will be able to hire and retain the number of qualified personnel required to meet the needs of, or to grow, our business. If we are unable to attract, train and retain the qualified personnel that we require at reasonable cost, our business and financial performance could be adversely affected.

22

Our success depends, to a large extent, on our reputation for the quality, reliability, timely delivery and safety of our products and services

We believe our track record and reputation are key factors in our clients’ evaluation of whether to engage our services and purchase our products, encouraging key industry players to partner with us, and recruiting and retaining talented personnel to our company. Our reputation is based, to a large extent, on the quality, reliability, timeliness and safety of our products and services. If our products do not meet expected standards or we fail to meet our deadlines, our relationship with our clients and partners could suffer, the reputation of our company could be adversely affected, we may not be invited to new bidding processes and our ability to capture new business could be severely diminished.

The nature of our business exposes us to potential liability claims and contract disputes

We may be subject to a variety of legal or administrative proceedings, liability claims or contract disputes. The government, clients and other third parties may present claims against us for injury or damage caused, directly or indirectly, by our operations, for example for alleged failures in our engineering and construction, the operation of our infrastructure concessions (such as our toll roads or the Lima Metro), and real estate developments we sell. Although we have a range of insurance coverage policies and have adopted risk management and risk avoidance programs designed to reduce potential liabilities, a catastrophic event resulting from the services we have performed or products we have provided could result in significant professional or product liability, warranty or other claims against us as well as reputational harm, especially if public safety is impacted. We may in the future be named as a defendant in legal proceedings where our clients or third parties may make a claim for damages or other remedies with respect to our projects or other matters. Any liability not covered by our insurance, or in excess of our insurance limits, could result in a significant loss for us, which may affect our financial performance.

We are susceptible to operational risks that could affect our business and financial performance

Our business is subject to numerous industry-specific operational risks, including natural disasters, adverse weather conditions, operator error or other accidents, mechanical and technical failures, explosions and other events and accidents, many of which are beyond our control. Such occurrences could result in injury or loss of life, severe damage to and destruction of property and equipment, business interruption, pollution and other environmental damage, clean-up responsibilities, regulatory requirements, investigations and penalties, potential liability claims and contractual disputes. In addition, such occurrences could materially impact our reputation. Although we maintain comprehensive insurance covering our assets and operations at levels that our management believes to be adequate, our insurance coverage will not be sufficient in all circumstances or to protect against all hazards. The occurrence of such an operational risk could have a material adverse effect on our business and financial performance.

Deterioration in our safety record could adversely affect our business and financial performance

Our ability to retain existing clients and attract new business is dependent on our ability to safely operate our business. Existing and potential clients consider the safety record of their services providers to be of high importance in their decision to award service contracts. Some of our activities, in particular in our E&C segment, can be high risk by their nature. If one or more accidents were to occur at a site, the affected client may terminate or cancel our contract and may be less likely to continue to use our services. Although our track record on safety matters is consistent with industry standards, we cannot assure you that we will not experience accidents in the future, causing our safety record to deteriorate. Accidents may be more likely as we continue to grow, particularly if we are required to hire less experienced employees due to shortages of skilled labor. Moreover, often times we do not perform these activities by ourselves and accidents can happen due to errors committed by partners and subcontractors over whom we have no control. Because many of our clients require us to report our safety metrics to them as part of the bidding process and because a substantial part of our client base is comprised of major companies with high safety standards, a general deterioration in our safety record could have a material adverse impact on our business including our ability to bid for new contracts.

Any safety incidents or deterioration in our safety record could adversely impact our ability to attract and retain qualified employees. In addition, we could also be subject to liability for damages as a result of accidents and could incur penalties or fines for violations of applicable safety laws and regulations.

23

Increases in the prices of energy, raw materials, equipment or wages could increase our operating costs

Our business requires significant purchases of energy, raw materials and components, including, among others, large quantities of fuel, cement and steel, as well as purchases or leases of equipment. Certain inputs used in our operations are susceptible to significant fluctuations in prices, over which we may have little control. The prices of some of these inputs are affected to a significant extent by the prices of commodities, such as oil and iron. Global oil prices increased in 2017, decreased in 2018, increased in 2019 but declined precipitously in March 2020 as a result of a dispute among OPEC members about global prediction levels and the effect on demand caused by the disruption of economic activity associated with the ongoing COVID-19 pandemic. We cannot assure you that oil prices will remain low in the future (although increased oil prices would benefit revenues in our Energy line of business). Substantial increases in the prices of such commodities generally result in increases in our suppliers’ operating costs and, consequently, lead to increases in the prices they charge for their products. Moreover, we do not have long-term contracts for the supply of our key inputs, and, as a result, if prices increase significantly or if we are required to find alternative suppliers, our costs to procure these inputs may increase significantly. In addition, growing demand for labor, especially when coupled with shortages of qualified employees in the countries where we operate, may result in significant wage inflation. To the extent that we are unable to pass along to our clients increases in the prices of our key inputs or increases in the wages that we must pay, our operating margins could be materially adversely impacted.

We may not be able to recover on claims against clients for payment

If a client fails to pay our invoices on time or defaults in making its payments to us, we could incur significant losses. We occasionally bring claims against clients for delayed payments, additional costs that exceed the contract price or for amounts not included in the original contract price, including change orders. These types of claims can occur due to matters such as owner-caused delays or changes from the initial project scope, and, occasionally, they can be the subject of lengthy proceedings. When these types of events occur and unresolved claims are pending, we may invest significant working capital in projects to cover cost overruns pending the resolution of the relevant claims. Moreover, we have recently encountered difficulties collecting on claims, even following successful arbitration awards, particularly against the government. A failure to promptly recover on these types of claims and change orders could have a material adverse effect on our financial performance.

If we are unable to enter into consortia or other strategic alliances, our ability to compete for new business may be adversely affected

We may join with other companies to form joint operations or other strategic alliances to compete for a specific concession or contract, including with partners that contribute expertise in a specific field. Because a consortium or alliance can often offer stronger combined qualifications than a company on a stand-alone basis, these arrangements can be important to the success of a particular bid. If we are unable to enter into consortia or other strategic alliances, our ability to compete for new business may be adversely affected.

Our consortia and other strategic alliances may be affected by disputes with, or the unsatisfactory performance by, our partners

Although we have a thorough partner selection process, consortia and other strategic alliances that we enter into as part of our business, including arrangements where operating control may be shared with unaffiliated third parties, may involve risks not otherwise present when we operate independently, including: sharing approval rights over major decisions; responsibility for our partners’ unpaid obligations or liabilities; ensuring ethical and compliance behavior; and inconsistencies in our and our partners’ economic or business interests or goals. Any disputes between us and our partners may result in delays, litigation or operational impasses. We may also incur liabilities as a result of action taken by our partners. In addition, if we participate in consortia or other strategic alliances where we are not the controlling party, we may have limited control over operational, financial and other management decisions and actions and the success of the consortium or other strategic alliance will depend largely on the performance of our partners. These risks could adversely affect our ability to transact the business of such consortium or other strategic alliance, and could result in the termination of the applicable concession or contract. Under these circumstances, we may be required to make additional investments and provide additional services to ensure adequate performance and delivery. These additional obligations could result in reduced profits or, in some cases, increased liabilities or significant losses for us. In addition, failure by a partner to comply with applicable laws or regulations could negatively

24

impact our business and, in the case of government contracts, could result in fines, suspension or even debarment from participating in bidding processes. As a result, our business and financial performance could be adversely affected by disputes involving our consortia or other strategic alliances.

We are dependent upon third parties to complete many of our contractual obligations

We rely on third-party suppliers to provide a significant amount of the materials and equipment used in our businesses. A portion of the work performed under our infrastructure concessions and, to a lesser extent, other contracts is performed by third-party subcontractors. As a result, the timely completion and quality of our projects may depend on factors beyond our control, including the quality and timeliness of the delivery of materials supplied for use in the project and the technical skills of subcontractors hired for the project. If we are unable to find qualified suppliers or hire qualified subcontractors, our ability to meet our contractual obligations could be impaired. In addition, if the amount we are required to pay for supplies, equipment or subcontractors exceeds what we have estimated, we may suffer losses under our contract. If a supplier or a subcontractor fails to provide supplies, equipment or services as required under a negotiated arrangement for any reason, or provides supplies, equipment or services that are not of an acceptable quality, we may be required to source those supplies, equipment or services on a delayed basis or at a higher price than anticipated, which could impact our financial performance. In addition, faulty materials or equipment could result in claims against us for failure to meet contractual specifications, and failure by suppliers or subcontractors to comply with applicable laws and regulations could negatively impact our reputation and our business and, in the case of government contracts, could result in fines, suspension or even debarment from participating in bidding processes. These risks may be intensified during economic downturns if these suppliers or subcontractors experience financial difficulties. As a result, our business and financial performance may be adversely affected by our dependence on third-party providers.

Failure to comply with, or changes in, laws or regulations could have a material adverse effect on our business and financial performance

We operate in highly regulated industries. Our business and financial performance depends on our and our clients’ ability to comply on a timely and efficient basis with extensive national, regional and municipal laws and regulations relating to, among other matters, environmental, health and safety, building and zoning, labor, tax and other matters. The cost of complying with these laws and regulations can be substantial. In addition, compliance with these laws and regulations can cause scheduling delays. Although we believe we are in compliance with applicable laws and regulations in all material respects, including our concessions or similar contractual obligations, we cannot assure you we have been or will be at all times in full compliance. Failure by us or our clients to comply with these laws and regulations, or our concessions or similar contractual obligations, could result in a range of adverse consequences for our business, including subjecting us to significant fines, civil liabilities and criminal sanctions, requiring us to comply with costly restorative orders, the shutdown of operations, and revocation of permits and termination of concessions or similar contracts. In addition, we cannot assure you that future changes to existing laws and regulations, or stricter interpretation or enforcement of existing laws and regulations, will not impair our ability to comply with such laws and regulations or increase our compliance costs.

We may be held liable for environmental damage caused by our operations

The nature of certain of our operations requires us to assume risks of causing environmental and other damages. We may be held liable for the environmental damage we cause, including the incidental consequences of human exposure to hazardous substances or other environmental damage. We may be subject to clean up costs or penalties in the event of certain discharges into the environment and/or environmental contamination and damage. Our environmental liability insurance may not be sufficient or may not apply to certain types of environmental damage. Any substantial liability for environmental damage could have a material adverse effect on our financial performance.

New environmental regulation as a result of climate change could impact our business and financial performance

Growing concerns about climate change could result in the imposition of additional or more stringent environmental requirements or regulations. For example, there are ongoing international efforts to address greenhouse emissions, such as the Kyoto Protocol or the more recent Paris Agreement, which are in various stages of negotiation

25

and implementation. If more stringent environmental regulation is adopted in the countries where we operate, we may be obliged to incur higher expenditures than anticipated, adversely affecting our financial performance. In addition, future remediation requirements in the event that we are found responsible for environmental damage may be substantial and could impact our financial condition. Moreover, more stringent environmental regulation could increase the costs of projects for our clients or, in some cases, prevent a project from going forward, thereby potentially reducing the demand for our services. Accordingly, new environmental regulation could have a material adverse effect on our business and financial performance.

We may not be able to effectively protect ourselves against financial market risks

Our operations are exposed to financial market risks, such as risks related to exchange rates, commodity prices and interest rates. Fluctuations in currency, commodity prices or interest rates could adversely affect our financial performance. We cannot assure you that derivative financial instruments, if any, will protect us from the adverse effects of financial market risks. While hedging transactions are intended to reduce market risks, such transactions may expose us to other risks, such as counterparty risk. We may not be able to adequately protect ourselves against financial market risks and may not ultimately achieve an economic benefit from our hedging strategy.

The loss of a key client in some of our lines of business may affect our business and financial performance

In some of our lines of business, such as our Infrastructure segment, a substantial amount of the revenue we receive is concentrated among a limited number of clients, including the Peruvian government. If one or more of these major clients fail or delay in paying our fees, or if there is a significant reduction or cancellation of business by one or more of these major clients, our business and financial performance may be adversely affected. If we are not able to capture new clients to replace the loss of business from existing key clients, our financial performance may be adversely affected.

Our use of the percentage-of-completion method of accounting for our Engineering and Construction segment could result in a reduction of previously recorded profits

In accordance with IFRS, we measure and recognize a large portion of our revenues under the percentage-of-completion accounting methodology which required us to make assumptions and estimates as of the date of the company’s consolidated financial statements.

Revenues from engineering and construction contracts are recognized by the percentage-of-completion method, which requires estimating the contract revenue and contract costs that will be obtained at culmination of work. Accordingly, these projections are determined by management based on their estimated budgets and adjusted periodically to reflect actual performance as work is completed. When changes occur that were not approved in a project’s original scope of work, income is recognized as equivalent to the costs incurred (i.e., no profit is recognized) until such changes have been approved.

Contract revenue and contract costs related to contracts are recognized in the company’s consolidated statement of income for the accounting periods in which the relevant work was executed. However, any expected or likely cost overruns that would exceed total expected revenue under the contract is recorded as an expense at the time of incurrence. In addition, any change in management’s estimates are reflected in contract revenue and contract cost for the period when such estimates are revised. Such adjustments could be material and could result in reduced profitability. In certain contracts, the terms of the agreement allow our customers to withhold certain amounts until construction is completed. Under these contracts, total collection from customers may not be realized until construction is completed.

While management believes that the estimates made pursuant to the percentage-of-completion method at the end of the 2019 year and prior years are reasonable and made in accordance with the above methodology, given the uncertainties associated with these types of contracts and inherent in the nature of some of the industries in which we operate, it is possible for actual costs to vary from estimates previously made, including due to changes in facts and circumstances, which may result in reductions or reversals of previously recorded profits.

26

Labor unrest could adversely affect our financial performance

All of our manual laborers and a portion of our employees are members of labor unions. Our practice is generally to extend benefits we offer our unionized employees to non-unionized employees. In our E&C segment, collective bargaining agreements are negotiated at two levels, on an annual basis between the Peruvian National Federation of Civil Construction and the Peruvian Chamber of Construction, without our direct involvement, and on a per project basis directly between the unions and us in accordance with such annual agreement. We also have collective agreements with our employees in certain of our business segments, which are also negotiated periodically. Although we consider that our relationship with unions is currently positive, we cannot assure you that we will not experience work slowdowns, work stoppages, strikes or other labor disputes in the future, which could result in the interruption or delay of our operations. Such interruptions or delays could have an adverse impact on our business, including on the cost of our projects and our ability to make timely delivery. Moreover, our operations may also be affected by labor unrest in our clients’ or our partners’ workforce.

The proceeds from our insurance policies may not be sufficient and we may not be insured against all risks

We maintain insurance coverage both as a corporate risk management strategy and in order to satisfy the requirements under certain regulations and contracts. We cannot assure you that proceeds from our insurance policies, however, will be sufficient to cover the damages resulting from any event covered by such policies. Certain risks are not covered under the terms of our insurance policies, such as interruption of operations. In such event, we may incur significant expenses to rebuild our facilities, repair or replace our equipment, or cover other damages. In addition, if any of our third-party insurers fail, abruptly cancel our coverage or otherwise cannot satisfy their insurance requirements to us, then our overall risk exposure and operational expenses could be increased. Moreover, we may not be able to renew our insurance policies on favorable terms, or at all. Although in the past we have been generally able to cover our insurance needs, we cannot assure you that we will be able to secure all necessary insurance in the future.

An increase in import duties and controls, or other restrictions on our obtaining instruments and equipment, may have a material adverse effect on our financial performance

Our future success depends in part on our ability to select and purchase high quality mechanical instruments and equipment at attractive prices. While we have historically been able to do so, such instruments and equipment may become subject to higher import taxes than currently apply. We cannot assure you that there will not be further increases in import taxes, changes in laws related to imports or the imposition of quotas by countries from which we import mechanical instruments and equipment, any of which could have a material adverse effect on our business. Furthermore, our ability to pay our instrument or equipment suppliers could be affected by our failure to obtain, on a timely basis, authorization from the Ministry of Justice pursuant to Law 30737 to make such payments. Law 30737 requires that companies such as our company that have been partners of groups that have been, or whose officers or representatives have been, convicted of, or have admitted to, corruption, money-laundering or similar crimes, submit money transfers abroad to the Peruvian Ministry of Justice for pre-approval. We cannot assure you that any such approvals will be granted in a timely manner or at all, and such restrictions may limit our ability to purchase necessary instruments and equipment.

The government may declare the nullity of public bidding processes after we have been awarded a project or concession

Even if we win the public bidding for a project or concession, the government may subsequently declare the process void for political, budgetary or other reasons and may cancel or terminate the project or concession awarded to us. For example, in June 2014, we were determined the winner of a public bidding for a concession to operate the fare collection system of Lima’s integrated transportation system for a period of 16 years. However, in January 2015, the Municipality of Lima notified us that the board of directors of the Instituto Metropolitano Protransporte de Lima – Protransporte had declared the nullity of the public bidding process, based on a report issued by the Peruvian Ministry of Economy and Finance, which concluded that the Ministry should have pronounced itself with respect to the concession prior to the bidding process instead of afterwards. We initiated a judicial proceeding in July 2015 to challenge such declaration of nullity, which proceedings remain ongoing. If upheld by the courts, the declaration of nullity of projects or concessions awarded to us could affect our future results of operations. Moreover, the uncertainty that results from these type of decisions may adversely impact investor confidence in Peru and our business.

27

Debarment from participating in government bidding processes could have an adverse impact on our business and financial performance

We or one or more of our subsidiaries would face debarment from participating in government bidding processes for one to three years if, including potentially as a result of the ongoing investigations against our company and GyM, we or our subsidiaries were found to have violated certain provisions of the Peruvian State Contracting Law (Ley de Contrataciones del Estado). We and our subsidiaries are required to comply with a large number of contractual obligations with the government in our business, and we cannot assure you that we will be in full compliance at all times. Moreover, the imposition of a debarment on a subsidiary could affect the ability of our company or our other subsidiaries (not just the subsidiary that was debarred), to participate in government bids under the Peruvian State Contracting Law. Approximately 99.9%, 82.5% and 97.3% of our E&C revenues for the 2019, 2018 and 2017 years, respectively, came from public-sector contracts in Peru. As of December 31, 2019, 72.8% of our backlog is comprised of contracts with the public sector. As a result, if we are debarred from participating in government bidding processes, our business and financial performance could be affected. To extent that economic conditions reduce private sector investments, being debarred from contracting with the Peruvian or other governments could further impact our company.

We may not be able to successfully expand outside of Peru

One of our long term strategies has been to continue to expand our operations outside of Peru, particularly in Chile and Colombia. We cannot assure you that we will be able to replicate our success in Peru in other countries. Our international expansion is subject to additional challenges, including: our ability to assimilate cultural differences and practices; our limited familiarity with local laws, regulators and contractors; our ability to attract and manage foreign personnel; the absence of a local workforce formed in our corporate values and familiar with our operations; competition in foreign markets, including from industry players with significantly greater local experience and reputation; and other risks specific to these countries. Moreover, we may not be able to make equity investments when needed by our foreign operations, due to restrictions imposed by Law 30737 on our ability to transfer funds abroad without pre-approval of the Peruvian Ministry of Justice.

Many countries in Latin America have suffered significant economic, political and social crises in the past, and these events may occur again in the future. If we are unable to overcome these challenges, we may not be able to successfully expand internationally.

We may not be able to make successful acquisitions

Part of our long-term strategy has been to evaluate strategic acquisition opportunities to expand our operations and geographic footprint, especially in Chile and Colombia. We may not be able to identify appropriate acquisition opportunities, or, if we do, we may overpay for these acquisitions or may not otherwise be able to negotiate terms and conditions that are acceptable to us. We may also face difficulties obtaining financing to pay for acquisitions. Law 30737 currently requires that payments we make abroad be submitted to the Peruvian Ministry of Justice for pre-approval, and we cannot assure you that any such approvals will be granted in a timely manner or at all.

In addition, we may not be able to obtain regulatory approvals, including antitrust approvals, required to consummate acquisitions. Furthermore, even if we are able to successfully consummate an acquisition, we may encounter challenges in integrating the acquired business effectively and profitably into our operations. The integration of an acquisition involves a number of factors that may affect our operations, including diversion of management’s attention, difficulties in retaining personnel and entry into unfamiliar markets. Acquired businesses may not achieve the levels of productivity anticipated or otherwise perform as expected. Acquisitions may bring us into businesses we have not previously conducted and expose us to additional business risks that are different from those we have traditionally experienced, including new geographic, market, operating and financial risks. Moreover, acquisitions involve special risks, including the potential assumption of unanticipated liabilities and contingencies. Even if such liabilities are assumed by the sellers, we may have difficulties enforcing our rights, contractual or otherwise. We cannot assure you that future acquisitions will meet our strategic objectives.

28

Our IT security measures may be breached or compromised and we may sustain system outages

Security breaches, whether intentional or unintentional, may threaten the confidentiality, integrity or availability of our information resources and may allow unauthorized access to our systems, disrupt our digital operations, corrupt data, or allow persons to misappropriate confidential data. Any breach of our network security measures could cause interruptions in our services or operations, damage our reputation and harm our ability to operate our business. This may result in client or supplier dissatisfaction and a loss of business. Our security measures may be inadequate to prevent security breaches, and we may be required to expend significant capital and other resources to protect against the threat of security breaches and to alleviate problems caused by breaches as well as by any unplanned unavailability of our IT systems caused by other reasons, which may adversely affect our business and financial performance.

Our services may infringe upon the intellectual property rights of others

Our services may infringe the intellectual property rights of third parties, and we may have infringement claims asserted against us. These claims may harm our reputation, increase our costs and prevent us from offering certain services or products. Any claims or litigation relating to intellectual property, even if ultimately decided in our favor, could be time-consuming and costly, injure our reputation or require us to enter into royalty or licensing arrangements. Any limitation on our ability to provide a service or product could result in our loss of revenue-generating opportunities and require us to incur additional expenses to develop new or modified solutions for future projects, which may adversely affect our business and financial performance.

Additional Risks Related to our Engineering and Construction Business

We are vulnerable to the cyclical nature of the end-markets we serve

Demand for our engineering and construction services is dependent on conditions in the end-markets we serve, which include, among others, the mining, power, oil and gas, transportation, real estate and other infrastructure sectors in Peru, as well as the mining sector in Chile and the energy sector in Colombia. Consequently, our engineering and construction business is closely linked to the performance and growth of these sectors, and it is exposed to many of the risks faced by our clients operating in these sectors, over which we have no control. These industries tend to be cyclical in nature and, as a result, although downturns can impact our entire company, our engineering and construction business has historically been subject to periods of very high and low demand. Factors that can affect these sectors include, among others, macroeconomic conditions, climate conditions, the level of private and public investment, the availability of credit, changes in laws and regulations, and political and social stability. The mining and oil and gas sectors, in particular, are also driven by worldwide demand for the underlying commodities, including, among others, silver, gold, copper, oil and gas, which can be affected by such other factors as global economic conditions and geopolitical affairs. A decline in prices for minerals, oil and gas has had in the past, and could have in the future, a significant impact on our clients’ exploration and production activities and, as a result, on their demand for our engineering and construction services. Since mid-March 2020, many of these sectors have been adversely affected by the COVID-19 pandemic and governments’ extraordinary measures to limit the spread of the virus. Accordingly, continuing adverse developments in the end-markets served by our engineering and construction business could have a material adverse effect on our financial performance.

Decreases in capital investments by our clients may adversely affect the demand for our services

Our engineering and construction business is directly affected by changes in private-sector and, to a lesser extent, public-sector investments for large-scale infrastructure projects. In addition, our engineering and construction business is directly affected by the availability and cost of financings for these projects. In the markets where we operate, investments and financings for large-scale projects have historically been influenced by macroeconomic and other factors which are beyond our control, including in the case of public-sector investment, government spending levels. As a result, we cannot assure you that clients will not choose to limit or not undertake new projects or delay, suspend or cancel existing projects. In 2018, Peru experienced a growth rate of 5.40% in private and public investment and, in 2019, Peru experienced a decline of 1.5%. In addition, since mid-March 2020, due to the COVID-19 pandemic and governments’ extraordinary measures to limit the spread of the virus, public and private sector investment in engineering and construction and infrastructure projects has stalled. Reductions in anticipated capital investments or available financing for large-scale projects could have a material adverse effect on our financial performance.

29

Our revenues may fluctuate based on project cycles, which we may not control

The substantial majority of the revenues from our engineering and construction business is generated from project awards, the timing of which may be unpredictable and outside of our control, especially considering the highly competitive bidding processes and complex and lengthy negotiations they involve. These processes can be impacted by a wide variety of outside factors including governmental approvals, financing contingencies and overall market and economic conditions. Moreover, because a significant portion of our revenues is generated from large-scale projects, our results of operations can fluctuate quarterly or yearly depending on whether and when project awards occur and the commencement and progress of work under awarded contracts. As a result, we are subject to the risk that revenues may not be derived from awarded projects as quickly as anticipated.

Our business may be adversely affected if we incorrectly estimate the costs of our projects

We conduct our engineering and construction business under various types of contractual arrangements where costs are estimated in advance. In some of our contracts (i.e., lump-sum, unit price and EPC), we bear the risk of some or all unanticipated cost overruns, including those due to inflation or certain unforeseen events. Risks under contracts which could result in cost overruns include: difficulties in performance of our subcontractors, suppliers, or other third parties; changes in laws and regulations or difficulties in obtaining permits or other approvals; unanticipated technical problems; unforeseen increases in the cost of inputs, components, equipment, labor, or the inability to obtain these on a timely basis; delays caused by weather conditions; incorrect assumptions related to productivity or scheduling estimates; and project modifications that create unanticipated costs or delays. These risks tend to be exacerbated for longer term contracts since there is increased risk that the circumstances under which we based our original bid could change. In many of our contracts, we may not be able to obtain compensation for additional work performed or expenses incurred. Our failure to estimate accurately the resources and time required to complete a project could adversely affect our profitability. Even under our cost-plus contracts, our inability to complete projects within the estimated budget could affect our relationship with our clients and negatively impact awards of future contracts. As a result, if we incorrectly estimate the costs of our projects, our business and financial performance could be adversely affected.

We may be unable to deliver our services in a timely manner

The success of our engineering and construction business depends on our ability to meet the standards and schedules required by our clients. Significant delays that prevent us from providing our services on agreed time frames could adversely affect our client relations and reputation. Delays may occur for a number of reasons, including: our inability to adequately foresee the needs of our clients; delays caused by our joint operation partners, subcontractors or suppliers; insufficient production capacity; equipment failure; shortage of qualified workers; changes to customs regulations; and natural disasters. Failure to finish construction by the contractual completion date set forth in the contract could result in costs that reduce our projected profit margins, including a requirement to pay daily penalties and damages. If we are unable to meet deadlines, either due to internal problems or as a result of events over which we have no control, we may lose the trust of our clients and, therefore, experience a decrease in the demand for our services. In such event, our business and financial performance could be adversely affected.

We may not be able to obtain compensation for additional work or expenses incurred as a result of client-requested change orders

Clients often determine, after commencement of the project, to change various elements of the project. Some of our contracts may also require that clients provide us with design or engineering information or with equipment or materials to be used on the project, and, in some cases, the client may provide us with deficient design or engineering information or equipment or materials or may provide the information or equipment or materials to us later than required by the project schedule. Our project contracts generally require the client to compensate us for additional work or expenses incurred due to client requested change orders or failure of the client to provide us with specified design or engineering information or equipment or materials. Under these circumstances, we generally negotiate with the client with respect to the amount of additional time required to make these changes and the compensation to be

30

paid to us. We are subject to the risk that we are unable to obtain, through negotiation, arbitration, litigation or otherwise, adequate amounts to compensate us for the additional work or expenses incurred by us due to client-requested change orders or failure by the client to timely provide required items. A failure to obtain adequate compensation for these matters could require us to record an adjustment to amounts of revenue and gross profit that were recognized in prior periods. Any such adjustments, if substantial, could have a material adverse effect on our financial performance.

We may have difficulty obtaining performance bonds that we require in the normal course of our operations

In our engineering and construction business, it is industry practice for customers to require performance bonds or other forms of credit support to secure, among other things, bids, advance payments and performance. We cannot assure you that in the future we will not encounter difficulties in obtaining such performance bonds or credit support. The Peruvian market for these types of credit instruments is small; moreover, under Peruvian banking regulations, lenders are required to impose limits on the amount of credit they extend to a group of affiliated companies. In addition, the ongoing COVID-19 pandemic may limit the availability of credit support that is available for engineering and construction businesses. Failure to provide performance bonds or credit support on terms required by clients may result in our inability to compete for or win new projects.

Additional Risks Related to our Infrastructure Business

A substantial or extended decline in oil prices may adversely affect our financial performance

A substantial part of the revenues of our infrastructure business depends upon prevailing prices for oil. Historically, oil prices and markets have been volatile and are likely to continue to be volatile in the future. Moreover, global oil prices have fluctuated significantly in recent years, with the average Brent crude prices decreasing from US$66.87 per barrel in 2017 to US$53.80 per barrel in 2018, and increasing to US$66.00 per barrel in 2019. The price of oil has dropped precipitously due in part to the COVID-19 pandemic as well as to disputes between OPEC members, to US$30.80 as of March 31, 2020 and US$ 18.83 as of April 30, 2020. Oil is a commodity and its price is subject to wide fluctuations in response to relatively minor changes in supply and demand for oil, market uncertainty, and a variety of additional factors beyond our control. Those factors include, among others: global demand and supply; political developments in producing regions; weather conditions; governmental regulations; international conflicts and acts of terrorism; the price and availability of alternative sources of energy; and overall local and global economic conditions. Moreover, lower oil prices may not only decrease our revenues on a per unit basis, but may also reduce the amount of oil we can produce economically, if any, and, as such, may have a negative impact on the reserves of the fields in which we operate. As result, our financial performance could be materially and adversely affected by declines in oil prices.

Our reserves estimates depend on many assumptions that may turn out to be inaccurate and are not subject to review by independent reserve auditors

The process of estimating oil and gas reserves is complex, although the fields where we produce oil and gas are mature (Block I has been in production for over 100 years, Block III for approximately 100 years, Block IV for approximately 95 years and Block V for over 50 years). In order to prepare our reserves estimates presented in this annual report, we must project production rates and timing of development expenditures as well as analyze available geological, geophysical, production and engineering data, and the extent, quality and reliability of this data can vary. The process also requires economic assumptions about matters such as oil prices, drilling and operating expenses, capital expenditures, taxes, and availability of funds. Therefore, estimates of reserves are inherently imprecise. Moreover, our reserve estimates included in this annual report have been prepared internally by our team of engineers, and have not been audited or reviewed by independent engineers. Future real production, oil and gas prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable reserves will most likely vary from the estimates presented in this annual report, and those variances may be material. Any significant variance could materially affect the estimated reserves of the fields in which we operate.

31

Our service contracts with Perupetro for Block I and Block V are currently set to expire in December 2021 and October 2023, respectively, which may adversely affect our financial performance

We operate and extract oil and natural gas from Block I under a 20-year hydrocarbon extraction service contract with Perupetro S.A., which was extended for an additional 10-year term and expires in December 2021. Average daily production during 2019 was 647 barrels of crude oil. We operate 219 wells using various oil extraction systems and operate a network of production batteries and pipelines to collect, measure and deliver oil in fiscalization point close to the Talara refinery. In addition, we operate and extract oil and natural gas from Block V under a 20-year hydrocarbon extraction service contract with Perupetro, which was extended for an additional 10-year term and expires in October 2023. Average daily production during 2019 in this field was 105 barrels of crude oil. We operate 40 wells in this field using various oil extraction systems. Our failure to renew either of these service contracts on favorable terms or at all could adversely affect our business or results of operations.

Our return on our investment in our concessions may not meet estimated returns

Our return on any investment in a concession is based on the terms and conditions of the concession, its duration and the amount of capital invested as well as the amount of revenues collected, debt service costs, payment of penalties and other factors. For example, traffic volume at toll roads may be affected by a number of factors beyond our control, including security conditions; general economic conditions; demographic changes; fuel prices; reduction in commercial or industrial activities in the regions served by the roads; changes in laws regarding toll payments, including related to the effects of the COVID-19 pandemic; and natural disasters. Decreased traffic at Norvial could adversely affect our financial performance. Although some of our concessions allow for adjustments based on economic conditions, certain concessions provide that adjustment requests be approved only if certain limited events specified in our concession contracts have occurred. If a request of adjustment is not granted, our financial performance could be affected. Given these factors and the possibility that governmental authorities could implement policies that affect our contractual return on investment in a way that we did not anticipate, we cannot assure you that our return on any investment under any concession will meet our estimates.

Governmental entities may terminate prematurely our concessions and similar contracts under various circumstances, some of which are beyond our control

Our ability to continue operating our concessions and similar public-sector contracts depends on governmental authorities, which may terminate the concession or contract pursuant to the provisions set forth therein or in accordance with applicable legislation, including the failure to comply with any contractual terms (including the concessionaire’s default on debt) or applicable law, including after giving effect to changes in laws (including any changes related to the effects of the COVID-19 pandemic). Moreover, the relevant governmental authority may terminate and/or repossess a concession at any time, if, in accordance with applicable law, the governmental authority determines that it is in the public interest to do so. The relevant governmental authority may also assume the operation of a concession in certain emergency situations, such as war, public disturbance or threat to national security. In addition, in the case of force majeure, the relevant governmental authority may require us to implement certain changes to our operations. If the government terminates any of our concessions, under Peruvian law, it is generally required to compensate us for the amount of our unrecovered investment, unless the concession is revoked pursuant to applicable law or the terms of the concession which would imply a serious breach of the concession’s terms by us. Such compensation process is likely to be time consuming and the amount paid to us may not fully compensate us. We cannot assure you that we would receive such compensation on a timely basis or in an amount equivalent to the value of our investment in a concession plus lost profits.

We are exposed to risks related to the operation and maintenance of our concessions and similar contracts

The operation and maintenance requirements under our concessions could encounter delays or cause us to exceed our budgeted costs for such projects, which could limit our ability to realize the expected return on these projects, increase our operating or capital expenses and adversely affect our business and financial performance. In addition, our operations may be adversely affected by interruptions or failures in the technology and infrastructure systems that we use to support our operations, including toll road collection and traffic measurement systems. The Lima Metro in particular may be susceptible to outages due to power loss, telecommunications failures and similar events. The failure of any of our technology systems may cause disruptions in our operations, adversely affecting our

32

profitability. While we have business continuity plans in place to reduce the adverse impact of information technology system failures on our operations, we cannot assure you that these plans will be effective. Furthermore, accidents and natural disasters may also disrupt the construction, operation or maintenance of our projects and concessions, which could adversely affect our business and financial performance.

We may not be successful in obtaining new concessions

The market for infrastructure concessions in Peru is competitive. We compete with Peruvian and foreign companies for infrastructure concessions in Peru, some of whom may have greater financial and other resources or particular expertise pertinent to a specific concession. Additionally, our public-sector clients may face budget deficits that may prohibit the development of infrastructure concessions, which could affect our business. We may also not be able to obtain additional concessions if the government decides not to award new concessions, due to budget constraints or policy changes or because alternative financing mechanisms are used. Recently, the awarding of concessions and the use of public-private associations in Peru have stalled, due in part to concerns related to the corruption scandal surrounding Odebrecht and its potential effect on government officials in the country. In addition, we may be temporarily unable to bid for or participate in new government concessions due to the outcome of the corruption investigations and civil and criminal proceedings facing the company in Peru, or any final settlement and cooperation agreement that we execute with the Peruvian government. Our inability to bid for or obtain new concessions may adversely affect our business and financial performance.

Moreover, we cannot assure you whether or when we will undertake any of the projects that have been awarded to us but for which contract negotiations are ongoing or stalled, in particular the concessions for Vía Expresa Sur, with respect to which we recently received a letter from the Municipality of Lima in which the Municipality communicated its desire to cease discussions to relaunch the project.

Additional Risks Related to our Real Estate Business

We are exposed to risks associated with the development of real estate

Our real estate business is subject to the risks that generally affect the real estate industry, such as availability and prices of suitable land, environmental and zoning regulations, interruptions in supply and volatility of the prices of construction materials and equipment, and changes in the demand for real estate. Our real estate business is specifically affected by the following risks: macroeconomic conditions in Peru that may impact the growth of the real estate sector as a whole, particularly in the residential market, including an increase in unemployment or a decrease in wage levels; an increase in prevailing interest rates or lack of available credit; changes in government subsidies for affordable housing; unfavorable real estate market conditions, such as an oversupply of residential units or scarcity of suitable land in particular areas; the level of customer interest in our new projects or the sales price per unit necessary to sell the unit may be lower than expected; customer perception of the security, convenience and attractiveness of our projects and the areas in which they are located; cost overruns, many of which may be beyond our control, that exceed our estimates and affect our profit margins, including the price of labor, land, insurance, taxes and public charges; the construction and sale of units may not be completed on schedule; bankruptcy or significant financial difficulties of large industry players, which cause a loss of confidence in the industry; limitations when contracting with government entities; and restrictions on real estate development imposed by local, regional and national authorities which often render restrictive or higher bureaucratic laws and regulations. Recently, real estate sales have slowed significantly due to the COVID-19 pandemic and government measures to contain the spread of the virus, and to a lesser extent, due to modifications by the government to a program (Bono de Buen Pagador) that encourages social interest housing sales as well as access to credit. The occurrence or continuation of any of the above events may have a material adverse effect on our business and financial performance.

Real estate prices may not continue to rise and may decline

Real estate prices in Peru have risen significantly over the last decade. We cannot assure you that this increase in real estate prices does not represent a bubble. Real estate prices in Peru may not continue to rise or may decline significantly, particularly if financing costs rise or consumer confidence in the real estate market erodes. In addition, real estate prices in Peru may decline significantly due to the ongoing COVID-19 pandemic and government measures to contain the spread of the virus. If real estate prices decline significantly, our business and financial performance could be materially and adversely affected.

33

Our business may be adversely affected if we are not able to obtain the necessary licenses and/or authorizations for our developments in due time

Real estate development requires obtaining certain licenses, authorizations and registrations. In Peru, municipal authorities are responsible for issuing most of the licenses that are required during the development stage, including zoning, demolition, construction and conformity (conformidad de obra) licenses, among others. As of March 31, 2020, we have approximately 17 real estate projects in various stages of development. For some of these projects, we have not yet initiated administrative proceedings with the appropriate authorities, or such proceedings are pending approval. A denial or an extended delay in issuing licenses, authorizations or registrations, or an extended delay by municipal authorities in approving licensing procedures, may render land unsuitable for development, delay the completion of planned projects, increase our costs or otherwise negatively impact the pricing of projects and adversely affect our business and financial performance.

The scarcity of financing, an increase in interest rates or an increase in the security required by financial institutions as collateral may adversely affect the ability or willingness of prospective buyers to purchase our real estate properties. In most cases, the purchasers of our residential or commercial properties finance at least part of the purchase price with mortgage loans. In 2017, 2018 and 2019, approximately 88%, 92% and 93%, respectively, of our residential units were sold to purchasers who received government subsidies to finance the purchase of homes. An increase in interest rates, whether as a result of market conditions or government action or otherwise, may cause a decrease in the demand for our residential and commercial properties and for land development. An increase in interest rates could also increase our own financing costs, which may, in turn, increase the sale price of our projects and adversely affect our business and financial performance.

We may experience difficulties in finding desirable land and increases in the price of land may increase our cost of sales and decrease our earnings

The continued growth of our real estate business depends in large part on our ability to continue to acquire land at a reasonable cost. As more developers enter or expand their operations in the Peruvian real estate sector, land prices could rise significantly and suitable land could become scarce or overpriced due to increased demand or decreased supply. A resulting rise in land prices may increase our cost of sales and decrease our earnings. We may not be able to acquire suitable land at reasonable prices in the future, which may have a negative impact on our financial performance.

Changing market conditions may adversely affect our ability to sell home inventories in our land and at expected prices

There is a lag between the time we acquire land and the time that we can bring the developed properties to market. Lag time varies by sector and on a project-by-project basis. As a result, we face the risk that demand for real estate may decline or that other developments may occur during this period that affect market conditions, and that we will not be able to dispose of developed properties or undeveloped land at expected prices or profit margins or within anticipated time frames or at all. Significant expenditures associated with investments in real estate, such as maintenance costs, architectural fees in high-end projects, construction costs and debt payments, cannot generally be reduced if changes in market conditions cause a decrease in expected revenues from our properties. Moreover, the market value of home inventories and undeveloped land can fluctuate significantly because of changing market conditions. As a result of these and other factors beyond our control, we may be forced to sell properties or land at a loss or for prices that generate lower profit margins than we anticipate.

Determinations by INDECOPI may adversely affect our ability to enforce binding contracts

In resolving consumer protection complaints in the real estate sector, INDECOPI has made determinations against real estate developers resulting in the modification of contractual provisions applicable to purchasers. Some purchasers of real estate properties have taken advantage of these INDECOPI determinations and filed complaints

34

against developers before INDECOPI and/or made public claims through the media seeking to obtain compensation for alleged deficiencies in housing construction as well as the modification of the terms of their contracts, which may have a negative impact on our real estate business. Although we have a small number of such complaints in INDECOPI, an increase in consumer complaints and consumer protective measures, particularly those resulting in the modification of contractual terms, may affect our ability to enforce our contracts under their original terms if we are not able to counter such claims, which in turn may have a negative impact on our real estate business.

Risks Related to Peru

Economic, social and political developments in Peru could adversely affect our business and financial performance

The substantial majority of our operations are conducted in Peru and depend on economic and political developments in the country. As a result, our business may be materially and adversely affected by economic downturns, currency depreciation, inflation, interest rate fluctuation, government policies, regulation, taxation, social instability, political unrest, drug trafficking, terrorism and other developments in or affecting the country, over which we have no control. In the past, Peru has experienced periods of severe economic recession, large currency devaluation and high inflation. We cannot assure you that Peru will not experience similar adverse economic developments in the future. In addition, Peru has experienced periods of political instability that has included a succession of regimes with differing economic policies and programs. Previous governments have imposed controls on prices, exchange rates, local and foreign investments and international trade, restricted the ability of companies to dismiss employees, expropriated private-sector assets and prohibited the remittance of profits to foreign investors. We cannot assure you that the Peruvian government will continue to pursue open-market policies that stimulate economic growth and social stability.

Moreover, investigations against former or current government officials relating to bribery payments made by Odebrecht have, and may continue to, result in political uncertainty in Peru. In March 2018, President Pedro Pablo Kuczynski presented his resignation, due to allegations of corruption for vote-buying in connection with the impeachment proceeding against him, and his first vice president, Martín Vizcarra, was sworn in as acting president. In September 2019, the executive branch, invoking article 134 of the constitution, dissolved congress and called for new legislative elections which were held in January 2020. The term of the new legislature will end on the same date as the current presidential term in July 2021. Criminal investigations have been initiated against former presidents Alejandro Toledo, Ollanta Humala, Alan García and Pedro Pablo Kuczynski. On April 17, 2019, former President Alan García committed suicide as prosecutors were preparing to detain him over matters relating to criminal investigations. Several corruption scandals regarding authorities at municipal, regional and national government levels are also ongoing, and former and current government officials have been detained. These corruption investigations have resulted in lower investments in large projects.

The political instability caused by these events could affect macroeconomic conditions in the country, including currency volatility, as well as have a negative effect on our business.

Fluctuations in the value of the sol could adversely affect financial performance

Fluctuations in the value of the sol relative to the U.S. dollar could adversely affect Peru’s economy. In addition, fluctuations in the value of the sol to the U.S. dollar can materially adversely affect our results of operations.

In 2017, 39.3% and 43.8% of our revenues were denominated in soles and U.S. dollars, respectively, whereas 63.9% and 18.3% of our costs of sales were denominated in soles and U.S. dollars, respectively. In 2018, 32.5% and 55.6% of our revenues were denominated in soles and U.S. dollars, respectively, whereas 63.0% and 23.1% of our costs of sales were denominated in soles and U.S. dollars, respectively. In 2019, 54% and 35% of our revenues were denominated in soles and U.S. dollars, respectively, whereas 64% and 21% of our costs of sales were denominated in soles and U.S. dollars, respectively. In the past the exchange rate between the sol and the U.S. dollar has fluctuated significantly. We cannot assure you that the value of sol against other currencies will not fluctuate significantly in the future, which could adversely affect the Peruvian economy and our business, financial condition and results of operations.

35

In addition, although Peruvian law currently imposes no restrictions on the ability to convert soles to foreign currency, in the 1980s and early 1990s, Peru imposed exchange controls, including controls affecting the remittance of dividends to foreign investors. We cannot assure you that exchange controls in Peru will not be implemented in the future. The imposition of exchange controls could have an adverse effect on the economy and on your ability to receive dividends from us as a holder of ADSs.

Inflation could adversely affect our financial performance

In the past, Peru has suffered through periods of hyperinflation, which have materially undermined the Peruvian economy and the government’s ability to create conditions that support economic growth. A return to a high inflation environment would also undermine Peru’s foreign competitiveness, with negative effects on the level of economic activity and employment.

As a result of reforms initiated in the 1990s, Peruvian inflation decreased significantly from four-digit inflation during the 1980s. The Peruvian economy experienced annual inflation of 4.4% in 2015, 3.2% in 2016, 1.4% in 2017, 2.2% in 2018 and 1.9% in 2019, as measured by the Peruvian Consumer Price Index (Índice de Precios al Consumidor del Perú).

If Peru experiences substantial inflation in the future, our costs of sales and administrative expenses could increase which could affect our operating margins. Inflationary pressures may lead to governmental intervention in the economy, including the introduction of government policies that may adversely affect the overall performance of the Peruvian economy. For example, in response to increased inflation, the Peruvian Central Bank, which sets the Peruvian basic interest rate, may increase or decrease the basic interest rate in an attempt to control inflation or foster economic growth.

Changes in tax laws may increase our tax burden and, as a result, negatively affect our financial performance

The Peruvian Congress and government regularly implement changes to tax laws that may increase our tax burden. These changes may include modifications in our tax rates and, on occasions, the enactment of temporary taxes that in some cases have become permanent taxes. Tax reforms related to the Peruvian income tax, value added tax and tax code have recently been approved, but we are unable to estimate the impacts that these reforms may have on our business. The effects of any tax reforms that could be proposed in the future and any other changes that result from the enactment of additional reforms have not been, and cannot be, quantified. However, any changes to our tax regime may result in increases in our overall costs and/or our overall compliance costs, which could negatively affect our financial performance.

Earthquakes, severe weather and other natural disasters could adversely affect our business and financial performance

Peru is located in an area that experiences seismic activity and occasionally is affected by earthquakes. For example, in 2007, an earthquake with a magnitude of 7.9 on the Richter scale struck the central coast of Peru, severally damaging the region south of Lima. Such conditions may result in physical damage to our properties and equipment, closure of one or more of our project sites and infrastructure concessions, inadequate work forces in our markets and temporary disruptions in the supply of construction materials. In addition, Peru has also experienced adverse climate conditions (due to climate change or otherwise) and adverse weather patterns, such as El Niño, an oceanic and atmospheric phenomenon that causes a warming of temperatures in the Pacific Ocean, resulting in heavy rains off the coast of Peru and potentially flooding. Poor weather conditions can have significant adverse effects on our engineering and construction activities as well as on our operation and maintenance of infrastructure assets business. Any of these factors may materially adversely affect the Peruvian economy and our business and financial performance.

A resurgence of terrorism in Peru could adversely affect the Peruvian economy and, as a result, our business and results of operations

In the past, Peru experienced severe terrorist activity that reached its peak of violence against the government and private sector in the late 1980s and early 1990s. In the mid-1990s, terrorist groups suffered significant defeats, including the arrest of leaders, resulting in considerable limitations in their activities. Despite the suppression of terrorist activity, we cannot assure you that a resurgence of terrorism in Peru, or other criminal activity, including drug trafficking, will not occur, or if there is such a resurgence, it will not disrupt the economy of Peru and our business.

36

The Peruvian economy could be affected by adverse economic developments in regional or global markets

Financial and securities markets in Peru are influenced, to varying degrees, by economic and market conditions in regional or global markets. Although economic conditions vary from country to country, investors’ perceptions of events occurring in one country may adversely affect cash flows and securities from issuers in other countries, including Peru. Changes in social, political, regulatory and economic conditions in large economies or in laws and policies governing foreign trade or affecting global financing conditions could create uncertainty in the international markets and could have a negative impact on emerging market economies, including the Peruvian economy, which in turn could have a negative impact on our operations. Since mid-March of 2020, the ongoing COVID-19 pandemic has disrupted economic activity and is likely to cause a global recession. The worsening of current global conditions or a new economic or financial crisis could affect Peru’s economy and, consequently, materially adversely affect our business and financial performance.

Risks Related to Chile, Colombia and other Latin American Countries

We face risks related to our operations outside of Peru

Latin American economic, political and social conditions may adversely affect our business. Our financial performance may be significantly affected not only by general economic, political and social conditions in Peru but also in other markets where we operate or intend to operate, including Chile and Colombia. During 2017, 2018, 2019, approximately 28.0%, 14.2% and 15.4%, respectively, of our revenues on a consolidated basis derived from operations outside of Peru.

These countries have suffered significant economic, political and social crises in the past, and these events may occur again in the future. We cannot predict whether changes in current administrations will result in changes in governmental policy and whether such changes will affect our business. Instability in the region has been caused by many different factors, including: significant governmental influence over local economies; substantial fluctuations in economic growth; high levels of inflation; changes in currency values; exchange controls or restrictions on expatriation of earnings; high domestic interest rates; wage and price controls; changes in governmental economic or tax policies, including retroactive changes; imposition of trade barriers, including import duties on information technology equipment; electricity rationing; liquidity of domestic capital and lending markets; unexpected changes in regulation; expropriations; and high levels of organized crime, terrorism and social conflicts, as well as overall political, social and economic instability. Moreover, macroeconomic conditions in these countries are highly influenced by global commodity prices, including the price of copper for Chile and the price of oil and gas for Colombia.

In addition, beginning in October 2019, Chile has suffered from widespread social unrest and vandalism that has had a significant economic and political impact on the country. The protests began over the government’s announcement of an increase in subway fares in Santiago and quickly grew into broader unrest over economic inequality, including claims about transportation costs, funding for education, health care costs and pension amounts, among others. The Chilean government imposed a state of emergency and nighttime curfews in Santiago and other cities; however, protests and violence continued. The Chilean government took a series of social and economic measures to tackle the issues at the heart of the unrest, and the Chilean congress convened a plebiscite initially to be held in March 2020 to determine whether constitutional amendments should be implemented. The plebiscite has been rescheduled to October 2020 as a result of the COVID-19 outbreak. This process may result in further social unrest and protest and could also result in substantial structural changes in Chile that could adversely impact the private sector, including our operations in the country.

Additionally, beginning in November 2019, Colombia experienced civic unrest in the form of a national strike and anti-government protests. Demonstrators in the country, protesting for several reasons, including opposing certain economic and political reforms proposed by the administration of President Duque, public corruption and the implementation of the peace agreement between Colombia and the guerrilla Fuerzas Armadas Revolucionarias de

37

Colombia (FARC). In addition, protestors have demanded reforms related to pensions, access to education, environmental protection and inequality, among others. Our Colombian operations could be adversely impacted by rapidly changing economic, political and social conditions in Colombia and by the Colombian government’s response to such conditions. Additionally, any changes in the government administration, changing regulations or policies relating to the construction and infrastructure sectors, or shifts in political attitudes in Colombia could adversely affect our business.

Risks Related to our ADSs

We have identified material weaknesses in our internal control over financial reporting, and if we cannot maintain effective internal controls or provide reliable financial and other information in the future, investors may lose confidence in the reliability of our consolidated financial statements, which could result in a decrease in the value of our ADSs

Based on the assessment of our internal control over financial reporting as of December 31, 2019, as required by Section 404 of the U.S. Sarbanes Oxley Act of 2002 (“SOX”), management has concluded that, as of such date, our internal control over financial reporting was not effective at the reasonable assurance level due to control deficiencies that constituted material weaknesses. Material weaknesses consisted of:

• deficiencies in the operational effectiveness of controls over SOX compliance, including (1) inadequate monitoring of entities that provide services to companies in our group and may have an impact in our financial reporting, (2) the lack of a procedure or implementation of controls for the assurance of the integrity and correctness of key reports and (3) the absence of self-assessment by controls owners;

• deficiencies in the design and operational effectiveness of the controls established in the accounting closing process with respect to the preparation and review of the annual and interim consolidated financial statements, including (1) inadequate supporting documentation for significant transactions prior to reflecting in accounting records, (2) late adoption of applicable accounting rules affecting our interim consolidated financial statements, (3) delay in undertaking evaluations required under IFRS 9 (Financial Instruments) and (4) failure to finalize a manual for accounting policies for all subsidiaries and our group as a whole; and

• deficiencies in (1) the implementation of our new payroll system (SAP) for employees established in 2019 and (2) the segregation of duties for both our new employee payroll system (SAP) and our existing construction worker payroll system.

The material weaknesses described above did not result in adjustments to our annual consolidated financial statements. However, these material weaknesses could result in misstatements in our financial results and disclosures, which could result in a material misstatement to our annual consolidated financial statements not being prevented or detected. Because of these material weaknesses, management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2019, based on criteria in Internal Control-Integrated Framework (2013) issued by the COSO.

For more information, see “Item 15. Controls and Procedures.” A “material weakness” is a deficiency, or combination of deficiencies, in internal controls such that there is a reasonable possibility that a material misstatement in financial statements will not be prevented or detected in a timely basis.

We are in the process of implementing measures to address these material weaknesses. We may not be able to remediate these identified material weaknesses. Moreover, we may in the future discover other areas of our internal controls that have material weaknesses or that need improvement, particularly with respect to businesses that we acquire.

38

Any failure to maintain an effective internal control over financial reporting, or implement required new or improved controls, could harm our operating results or cause us to fail to meet our reporting obligations. If we are unable to conclude that we have effective internal control over financial reporting, or if our independent registered public accounting firm is unable to provide us with an unqualified opinion regarding the effectiveness of our internal control over financial reporting, investors could lose confidence in the reliability of our consolidated financial statements, which could result in a decrease in the value of our ADSs.

The market price of our ADSs may fluctuate significantly, and you could lose all or part of your investment

Volatility in the market price of our ADSs may prevent you from being able to sell your ADSs at or above the price you paid for them. The market price and liquidity of the market for our ADSs may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance. These factors include, among others: actual or anticipated changes in our results of operations, quarterly fluctuations, or failure to meet expectations of financial market analysts and investors; the impact of corruption allegations and investigations; investor perceptions of our prospects or our industries; operating performance of companies comparable to us and increased competition in our industries; new laws or regulations or new interpretations of laws and regulations applicable to our business; general economic trends in Peru; catastrophic events, such as earthquakes and other natural disasters; and developments and perceptions of risks in Peru and in other countries.

Substantial sales of ADSs or common shares could cause the price of our ADSs or common shares to decrease

Significant shareholders hold a large number of our common shares. These securities are eligible for sale. The market price of our ADSs could decline significantly if we or our significant shareholders sell securities in our company or the market perceives that we or our significant shareholders intend to do so.

We may raise additional capital in the future through the issuance of equity securities, which may result in dilution of the interests of our shareholders

We may need to raise additional capital and may opt for obtaining such capital through the public or private placement of common shares, debt securities or debt securities convertible into our common shares. In such event we may seek to obtain financing through the exclusion of the preemptive rights of our shareholders, which may dilute the percentage interests of investors in our common shares.

No shareholder or group of shareholders holds a majority of our common shares

No shareholder or group of shareholders currently owns a majority of our common shares. In addition, there is no shareholders’ agreement among any of our significant shareholders. Accordingly, no shareholder or group of shareholders may on its own determine the outcome of substantially all matters submitted for a vote to our shareholders. In addition, a new investor or group of investors may in the future seek to acquire a significant stake in, or control of, our company, subject to compliance with Peruvian tender offer requirements which require that a tender offer be made to all shareholders upon, among other matters, acquisition of 25%, 50% and 60% of our voting rights. If a new investor or group of investors acquires a significant stake in, or control of, our company, we cannot assure you that such investor or group of investors will not seek to change how our business is managed.

Holders of ADSs may be unable to exercise voting rights with respect to our common shares underlying the ADSs at our shareholders’ meetings

As a holder of ADSs representing common shares being held by the depositary in your name, you may exercise voting rights with respect to the common shares represented by the ADSs only in accordance with the deposit agreement relating to the ADSs. Holders of our common shares will receive notice of shareholders’ meetings through publication of a notice 25 days in advance, in accordance with Peruvian law, in the official gazette in Peru, a Peruvian newspaper of general circulation and the website of the Peruvian Securities Commission, and will be able to exercise their voting rights by either attending the meeting in person or voting by proxy. ADS holders will not receive notice directly from us. Instead, pursuant to the deposit agreement, we will notify the depositary, who will mail to holders of ADSs the notice of the meeting and a statement as to the manner in which voting instructions may be given. To exercise their voting rights, ADS holders must instruct the depositary how to exercise the voting rights for the common shares which underlie their ADSs. Due to these additional procedural steps involving the depositary, the process for exercising voting rights may take longer for ADS holders than for holders of our common shares.

39

Holders of ADSs also may not receive voting materials in time to instruct the depositary to vote the common shares underlying their ADSs. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions of the holders of ADS or for the manner of carrying out such instructions, unless such failure can be attributed to gross negligence, bad faith or willful misconduct on the part of the depositary or its agents. Accordingly, holders of ADSs may not be able to exercise voting rights, and they will have little, if any, recourse if the underlying common shares are not voted as requested.

Our shareholders’ ability to receive cash dividends may be limited

Our shareholders’ ability to receive cash dividends may be limited by the ability of the depositary to convert cash dividends paid in soles into U.S. dollars. Under the terms of our deposit agreement with the depositary for the ADSs, the depositary will convert any cash dividend or other cash distribution we pay on the common shares underlying the ADSs into U.S. dollars, if it can do so on a reasonable basis and can transfer the U.S. dollars to the United States. If this conversion is not possible or if any government approval is needed and cannot be obtained, the deposit agreement allows the depositary to distribute the foreign currency only to those ADR holders to whom it is possible to do so. If the exchange rate fluctuates significantly during a time when the depositary cannot convert the foreign currency, you may lose some or all of the value of the dividend distribution.

Holders of ADSs may be unable to exercise preemptive or accretion rights with respect to the common shares underlying their ADSs

Under Peruvian corporate law, if we issue new common shares as part of a capital increase, unless otherwise agreed to by holders of 40% of our subscribed voting common shares and, provided that such capital increase does not favor, directly or indirectly, certain shareholders to the detriment of others, our shareholders will generally have the right to subscribe to a proportional number of common shares of the class held by them to maintain their existing ownership percentage, which is known as preemptive rights. In addition, shareholders are entitled to the right to subscribe for the unsubscribed common shares at the end of a preemptive rights offering, on a pro rata basis, which is known as accretion rights. You may not be able to exercise the preemptive or accretion rights relating to common shares underlying your ADSs unless a registration statement under the Securities Act is effective with respect to those rights or an exemption from the registration requirements of the Securities Act is available. We are not obligated to file a registration statement with respect to the common shares relating to these preemptive and accretion rights, and we cannot assure you that we will file any such registration statement. Unless we file a registration statement or an exemption from registration is available, you may receive only the net proceeds from the sale of your preemptive and accretion rights by the depositary or, if the preemptive and accretion rights cannot be sold, they will be allowed to lapse. As a result, U.S. holders of our ADSs may suffer dilution of their interest in our company upon future capital increases.

We are entitled to amend the deposit agreement and to change the rights of ADS holders under the terms of such agreement without the prior consent of the ADS holders

We are entitled to amend the deposit agreement and to change the rights of the ADS holders under the terms of such agreement without the prior consent of the ADS holders. Any change related to an increase in deposits or charges for book-entry securities services or any modification that might hinder the rights of the ADS holders will be effective within 30 days after the ADS holders have received notice of such change or modification and such holders will have no right to any compensation whatsoever.

Peru has different corporate disclosure and accounting standards than those you may be familiar with in the United States

Financial reporting and securities disclosure requirements in Peru differ in certain significant respects from those required in the United States. There are also material differences among IFRS, Peruvian GAAP and U.S. GAAP. Accordingly, the information about us available to you will not be the same as the information available to holders of

40

shares issued by a U.S. company. In addition, the Peruvian Securities Market Law, which governs open or publicly listed companies, such as us, imposes disclosure requirements that are more limited than those in the U.S. in certain important respects. Although Peruvian law imposes restrictions on insider trading and price manipulation, applicable Peruvian laws are different from those in the United States, and the Peruvian securities markets are not as highly regulated and supervised as the U.S. securities markets.

Our status as a foreign private issuer allows us to follow alternate standards to the corporate governance standards of the New York Stock Exchange, which may limit the protections afforded to investors

We are a foreign private issuer within the meaning of the New York Stock Exchange (“NYSE”) corporate governance standards. Under NYSE rules, a foreign private issuer may elect to comply with the practices of its home country and not to comply with certain corporate governance requirements applicable to U.S. companies with securities listed on the exchange. We currently follow certain Peruvian practices concerning corporate governance and intend to continue to do so. Accordingly, holders of our ADSs will not have the same protections afforded to shareholders of companies that are subject to all NYSE corporate governance requirements.

For example, the NYSE listing standards provide that the board of directors of a U.S. listed company must have a majority of independent directors at the time our company ceases to be a “controlled company.” Under Peruvian corporate governance practices, a Peruvian company is not required to have a majority of independent members on its board of directors. The listing standards for the NYSE also require that U.S. listed companies, at the time they cease to be “controlled companies,” have a nominating/corporate governance committee and a compensation committee (in addition to an audit committee). Each of these committees must consist solely of independent directors and must have a written charter that addresses certain matters specified in the listing standards. Under Peruvian law, a Peruvian company may, but is not required to, form special governance committees, which may be composed partially or entirely of non-independent directors. In addition, NYSE rules require the independent non-executive directors of U.S. listed companies to meet on a regular basis without management being present. There is no similar requirement under Peruvian law.

The NYSE’s listing standards also require U.S. listed companies to adopt and disclose corporate governance guidelines. In July 2002, the Peruvian Securities Commission and a committee comprised of regulatory agencies and associations prepared and published a list of suggested non-mandatory corporate governance guidelines called the “Principles of Good Governance for Peruvian Companies.” Although we have implemented these measures, we are not legally required to comply with the corporate governance guidelines, only disclose whether or not we are in compliance.

Minority shareholders in Peru are not afforded equivalent protections as minority shareholders in other jurisdictions and investors may face difficulties in commencing judicial and arbitration proceedings against our company or the controlling shareholder

Our company is organized and existing under the laws of Peru. Accordingly, investors may face difficulties in serving process on our company, officers and directors or significant shareholders in the United States of certain other jurisdictions, and in enforcing decisions granted by courts located in other jurisdictions against our company, our officers and directors or significant shareholders that are based on securities laws of jurisdictions other than Peru.

In Peru, there are no proceedings to file class action suits or shareholder derivative actions with respect to issues arising between minority shareholders and an issuer, its controlling shareholders or directors and officers. Furthermore, the procedural requirements to file actions by shareholders differ from those of other jurisdictions, such as in the United States. As a result, it may be more difficult for our minority shareholders to enforce their rights against us, our directors, officers or significant shareholders as compared to the shareholders of a U.S. company. The deposit agreement provides that the depositary has no obligation to commence or become involved in any judicial proceedings and any other legal actions relating to the ADSs or the deposit agreement, either on behalf of the ADS holders or on behalf of any other person.

41

Judgments of Peruvian courts with respect to our common shares will be payable only in soles

If proceedings are brought in the courts of Peru seeking to enforce our obligations in respect of the common shares, we will not be required to discharge our obligations in a currency other than soles. Under Peruvian exchange control limitations, an obligation in Peru to pay amounts denominated in a currency other than soles may be satisfied in Peruvian currency only at the exchange rate, as determined by the Peruvian Central Bank, in effect on the date the judgment is obtained, and such amounts are then adjusted to reflect exchange rate variations through the effective payment date. The then prevailing exchange rate may not afford non-Peruvian investors with full compensation for any claim arising out of or related to our obligations under the ADSs.

If securities or industry analysts publish unfavorable research about our business or if they cease to follow our business, the price and trading volume of the ADSs could decline

The trading market for the ADSs will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts who covers us downgrades the ADSs or publishes unfavorable research about our business, the price of the ADSs would likely decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for the ADSs could decrease, which could cause the price and trading volume of the ADSs to decline.

ITEM 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

Graña y Montero has been operating in Peru since 1933 and it is listed on the Lima Stock Exchange since 1997. Set forth below are key highlights in our company’s history:

• Graña y Montero traces its origins to its predecessor company GRAMONVEL, founded more than 85 years ago by, and named after, engineers Alejandro Graña Garland, Carlos Montero Bernales and Carlos Graña Elizalde. We began primarily as a construction company.

• We expanded our operations internationally in 1943 with our contract to build a Nestle factory in Venezuela.

• In 1948, we began one of our largest projects since our founding—the construction of the city of Talara for the International Petroleum Company, which was completed in 1957.

• In 1949, GRAMONVEL merged with Morris y Montero to form Graña y Montero Contratistas Generales S.A. (now GyM S.A., our construction subsidiary), expanding its service offerings and increasing its capacity to undertake large-scale infrastructure projects.

• In 1983, we began a diversification strategy by developing complementary lines of business. In 1984, we founded GMP, our oil and gas subsidiary. In 1985, we partnered with Sonda S.A. (a Chilean IT services company) to form GMD, our IT services subsidiary. Beginning in 1987, we founded our real estate development business, which currently operates under Viva GyM, which was incorporated in 2008.

• In 1996, we reorganized our subsidiaries and founded Graña y Montero, which became the principal shareholder of all our subsidiaries. In 1997, we listed our company on the Lima Stock Exchange.

• In 1998, our company built Larcomar, a landmark shopping center in Lima that has become a popular tourist destination, which we sold in 2010.

• In 2003, 2006 and 2007, we were awarded the concessions for the construction, operation and maintenance of the Norvial, Canchaque and Survial toll roads, respectively.

42

• In 2007, we also developed the first large-scale affordable housing project in Lima, consisting of 3,400 apartment units and located in the district of El Agustino.

• In 2012, we began operating the Lima Metro.

• In July 2013, we listed our company on the NYSE.

• In 2012 and 2013, we acquired 74.0% and 6.4%, respectively, of Ingeniería y Construcción Vial y Vives S.A. (“Vial y Vives”), an engineering and construction company specializing in the Chilean mining sector. In August 2013, we acquired 86.0% of DSD Construcciones y Montajes S.A. (“DSD Construcciones y Montajes”), a Chilean engineering and construction company specialized in providing services to the energy, oil and gas, cellulose and mining sectors in Chile and Latin America. In July 2014, our subsidiary Vial y Vives merged with DSD Construcciones y Montajes to form Vial y Vives-DSD S.A. (“Vial y Vives-DSD”), through our subsidiary GyM Chile SpA, we hold an 86.2% interest in Vial y Vives-DSD. As of the date of this annual report, we hold a 94.5% interest in Vial y Vives-DSD.

• In December 2014, our subsidiary GyM S.A. acquired 70% of the share capital of Morelco S.A.S. (“Morelco”), a Colombian engineering and construction company specialized in the oil and gas and other energy sectors.

• In April 2015, GMP started operations of its hydrocarbon extraction services in Blocks III and IV for Perupetro, in the provinces of Talara and Paita in northern Peru.

Graña y Montero, S.A.A. was incorporated in 1996 and is a publicly-held corporation (sociedad anónima abierta) organized under the laws of Peru. Our principal executive office is located at Avenida Paseo de la República 4667, Lima 34, Peru, and our main telephone number is +511-213-6565. Our website address is www.granaymontero.com.pe. Information contained on, or accessible through, our website is not incorporated in this annual report, and you should not consider any such information part of this annual report. The SEC maintains a website (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

For information on our organizational structure, see “Item 4.C. Information on the Company – Organizational Structure.”

For information on our capital expenditures and divestitures, see “Item 5.B. Operating and Financial Review and Prospects— Liquidity and Capital Resources—Capital Expenditures.”

For information on the availability of filings we make electronically with the SEC, see “Item 10H. Additional Information—Documents on Display.”

B. Business Overview

Overview

We are the largest engineering and construction company in Peru as measured by revenues during 2019, and one of the largest publicly-traded engineering and construction companies in Latin America as measured by market capitalization as of December 31, 2019, with strong complementary businesses in infrastructure and real estate.

With more than 85 years of operations, we have a long track record of successfully completing the engineering and construction of many of Peru’s landmark private- and public-sector infrastructure projects, such as the Lima International Airport and the Peru LNG gas liquefaction plant, and we believe we have a track record of operational excellence in our markets. We have developed a highly-experienced management team, a talented pool of more than 1,900 engineers and a skilled work force that share our core corporate values of quality, professionalism, reliability and efficiency. As a company listed on the Lima Stock Exchange since 1997 and the NYSE since 2013, we also endeavor to meet the highest corporate governance standards in Peru.

43

Beginning in the mid-1980s, we leveraged our engineering and construction expertise into complementary lines of business, such as the development, ownership, operation and maintenance of infrastructure assets (including the Lima Metro, Peru’s only urban railway system), as well as real estate development. We believe our business mix creates significant opportunities across our lines of business, generates more stable revenues and earnings on a consolidated basis, and provides additional financial stability to our company.

Through the successful execution of those projects, we have developed operational experience in other Latin American countries. We have further expanded our activities in other key markets of the region through the acquisition of businesses with solid positions in those markets. In October 2012, we acquired a controlling interest in Vial y Vives, an engineering and construction company specializing in the Chilean mining sector, and in August 2013, we acquired a controlling interest in DSD Construcciones y Montajes, a Chilean engineering and construction company specialized in providing services to the energy, oil and gas, cellulose and mining sectors in Chile and Latin America. In December 2014, we acquired a controlling interest in Morelco, an engineering and construction company specialized in the Colombian oil and gas and other energy sectors.

The tables below show our backlog, revenues and EBITDA from 2015 to 2019.

During 2019, we generated revenues of S/4,085.0 million (US$1,231.5 million), EBITDA of -S/159.0 million (-US$47.9 million), and net loss of S/838.6 million (US$252.8 million) including net loss attributable to controlling interest of S/884.7 million (US$266.7 million).

Our Strengths

We believe our company’s strengths provide us with significant competitive advantages. Our principal strengths include the following:

Leader in growing markets

We are the largest engineering and construction company in Peru as measured by revenues during 2019, and one of the largest publicly-traded engineering and construction companies in Latin America as measured by market capitalization as of December 31, 2019. Prior to the impact of the COVID-19 pandemic, Peru has been undergoing a period of development, with over 4.0% average annual real GDP growth between 2010 and 2019 and significant private and public investments in the mining, power, oil and gas, transportation, real estate and other infrastructure sectors. We have completed some of the most complex and large-scale infrastructure projects in the country, and we believe we are an integral part of Peru’s ongoing transformation with projects that contribute to the overall economic development of the country. We believe our expertise, track record, scale and operational capabilities in Peru position us to take advantage of the country’s favorable economic conditions and growth opportunities. We believe we are also a significant infrastructure concessionaire in Peru and a large apartment building developer in Peru.

44

Long-standing track record for operational excellence

During our more than 85-year history, we have focused on the successful and on-time execution of complex projects, through our “deliver before deadline” and “lean construction” initiatives. Our extensive experience has allowed us to gain deep market knowledge and expertise, which help us better serve our clients and manage risks in our contractual arrangements. We believe we have a track record of operational excellence. We believe that our track record of operational excellence are key factors in winning new and repeat business, as well as in partnering with strategic industry players and attracting top talent to our company.

Complementary lines of business which generate more stable cash flows and create additional business opportunities across our segments

We have expanded our company by developing complementary lines of business, many of which have become leaders in their respective markets. These lines of business create significant business opportunities across our segments, enabling us to capture a greater share of infrastructure spending, and also generate cost synergies. One example is Norvial, a toll road concession operated within our Infrastructure segment. In addition to managing the concession, we used our E&C segment to design and construct the expansion of the highway and, once constructed, we are now using our Infrastructure segment to operate and maintain the highway. In addition to increasing our levels of consolidated activity, many of these lines of business enable us to achieve more stable cash flows through medium and long-term client service contracts and concessions, which counter in part the cyclicality of the engineering and construction business.

Significant backlog

Our backlog amounted to US$1,396.4 million as of December 31, 2019. We believe that our backlog, which as of December 31, 2019 represented approximately 1.13x of our related 2019 revenues, provides visibility as to our potential for growth in the coming years, although backlog may not always be an accurate indicator of future revenues. See “Item 3.D. Key Information—Risk Factors—Risks Related to our Company—Our backlog and our ratio of historical backlog to revenues may not be reliable indicators of future revenues or profit.” Moreover, we believe our backlog is strategically targeted to our key end-markets such as mining, infrastructure, power, energy and real estate. Approximately 72.8% of our backlog across our segments as of December 31, 2019 is comprised of contracts with the private sector. Furthermore, we continuously evaluate bidding on contracts arising from the significant ongoing private and public investments in Latin America.

Proven ability to create and grow businesses organically and through acquisitions

We have proven our ability to extend our engineering and construction capabilities into complementary lines of business in a diverse range of industries, some of which began as innovative start-ups in response to client needs. For example, in October 2012, we acquired Vial y Vives, an engineering and construction company specializing in the Chilean mining sector which complements our leading E&C practice in the mining sector. In August 2013, we acquired a controlling interest in DSD Construcciones y Montajes, a Chilean engineering and construction company whose main focus is electromechanical works and assemblies in construction projects related to oil refineries, pulp and paper, power plants and mining plants. In December 2014, we acquired a controlling interest in Morelco, an engineering and construction company specialized in the Colombian oil and gas and other energy sectors. We believe that our proven ability to create new businesses, develop businesses organically and acquire and successfully integrate new businesses into our platform is a key competitive advantage to expand our operations in Latin America.

Highly experienced management, talented engineers and skilled workforce, with shared core corporate values

We motivate our management through performance-based compensation, which align their interests with those of our shareholders. In addition, through our efforts to attract, train and retain our workforce, we have built a talented team of employees, including more than 1,900 engineers. We also have access to a network of approximately 132,000 manual laborers throughout Peru that can supplement our workforce when required by our construction pipeline. Thanks to our extensive and talented team, we have the capability and scale to undertake large and complex projects in Peru and elsewhere.

We have developed a strong corporate culture based on principles of high quality, professionalism, reliability and efficiency, as well as compliance and risk management. We safeguard the health and safety of our collaborators and of all the persons participating in our operations and services. To that end, we provide safe work conditions, we manage risks in a timely manner and we promote a culture of prevention, starting from the leadership and commitment of our senior management. In 2019, we had an accident incidence rate of 0.25, calculated over 200,000 hours worked.

45

Our Strategies

In response to the impact of our association with Odebrecht in certain projects in Peru and the termination of the GSP pipeline concession, we continue to implement a strategic action plan, as described in “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Recent Developments (2017—2020).”

Our vision is to be “the most reliable engineering services company in Latin America.” Our key long-term strategies to achieve this vision include being the contractor of choice for large-scale and complex projects in Peru and other key Latin American markets, and continuing to foster our corporate values throughout the organization.

We intend to enhance our position as a contractor of choice for large-scale and complex infrastructure projects in Peru and other key Latin American markets, by (i) utilizing the scale, expertise and market knowledge we have accumulated during our more than 80-year operating history to strengthen and expand our E&C segment; (ii) maintaining and further developing our long-standing client relationships based on our ongoing pursuit of operational excellence; (iii) continuing to strategically partner with global industry leaders, with complementary capabilities for specific projects that we undertake; and (iv) leveraging our expertise in the mining sector with a view to becoming the premier mining services provider throughout Latin America.

We will continue to instill our core corporate values throughout our organization, while also transmitting these values to surrounding communities. We will continue to attract and develop our human capital through various training, mentorship and reward programs in order to maintain our position as the best company in Peru to learn and work in the engineering and construction field. We also seek to promote social welfare by fostering relationships with the communities that surround our areas of operation. We strive to promote our corporate values to strengthen our organization and improve our performance as well as to have a positive impact on the markets where we operate.

Engineering and Construction

Our E&C segment has a more than 85-year track record and is the largest engineering and construction company in Peru as measured by revenues during 2019, undertaking a broad range of activities relating to: engineering; civil construction; electromechanic construction and building construction. We provide E&C services for a diverse range of end-markets, focusing on the mining, power, oil and gas, transportation, real estate and other infrastructure sectors. The following chart sets forth our 2019 revenues by end-market.

46

2019 E&C Revenues by End-Market

In our E&C segment, we mainly undertake private-sector projects, particularly projects with a high degree of complexity, which enable us to develop innovative and tailor-made solutions to our clients. We provide our clients with an integral service offering by leveraging our various areas of expertise and engaging in virtually all aspects of project execution, thereby capturing a larger share of investment projects.

In 1999, we began adopting the “lean construction” philosophy as a pillar in our design and construction projects. “Lean construction” aims to create value for customers by better understanding and considering clients’ needs to improve project design, functionality and cost optimization. “Lean construction” also provides techniques and tools that significantly reduce construction waste by improving planning reliability, process design, coordination and collaboration.

Although we primarily undertake engineering and construction projects in Peru, our clients often ask us to undertake the engineering and construction of large and complex projects in other countries, such as Mexico, the Dominican Republic, Bolivia, Panama and Chile. As a result, we have developed extensive experience executing projects throughout Latin America. To further capitalize on our capabilities and expertise, we have expanded our activities into other key markets, such as Chile and Colombia, which have been benefitting from high levels of investment and are aligned with our areas of strategic focus. In 2019, approximately US$190 million (S/630 million) of our E&C revenues were derived from international projects outside of Peru.

The acquisition of two companies, Vial y Vives and DSD, which were later merged, has solidified our presence in Chile. While we have been undertaking projects in Chile since 1995, such as the construction of the transmission line and crusher of the Caserones mine for SCM Minera Lumina Copiapo, we believe we will benefit from the established and long-lasting presence in the country of both Vial y Vives and DSD Construcciones y Montajes. Moreover, through the acquisition in December 2014 of Morelco, an engineering and construction company focused on the oil and gas and other energy sectors, we established our presence in the Colombian market.

Given the prevalence of mining operations in our principal markets, we have significant expertise with respect to specialized engineering and construction services for the mining sector. As a result, we believe we are one of the leading mining construction companies in Latin America and we leverage this expertise both within our principal markets as well as to selectively undertake complex projects across the region.

47

The table below sets forth selected financial information for our E&C business segment.

	As of and for the year ended December 31,
	2017			2018			2019			2019
	(in millions of S/, except as indicated)									(in millions of US$)(1)
Revenues		2,331.9			1,960.9			2,797.3			843.3
Net profit		12.4			(85.4	)		(140.6	)		(42.4	)
Net profit (loss) attributable to controlling		12.1			(86.9	)		(137.1	)		(41.3	)
EBITDA		120.0			19.2			2.9			0.9
EBITDA margin		5.1	%		1.0	%		0.1	%		—
Backlog (in millions of US$)(2)		772.5			782.6			—			910.1
Backlog/revenues ratio(2)		1.1x			1.3x			—			1.08x

(1) Calculated based on an exchange rate of S/3.317 to US$1.00 as of December 31, 2019.

(2) For more information on our backlog, see “—Backlog.” Backlog is calculated as of the last day of the applicable year. Revenues are calculated for such year and converted into U.S. dollars based on the exchange rate published by the SBS on December 31 of the corresponding year.

Principal Engineering and Construction Activities

The following chart sets forth our 2019 revenues by E&C activity.

2019 E&C Revenues by Activities

Civil Construction

Our civil construction activities focus on infrastructure projects, including earthworks, the construction of roads, highways, transportation facilities (e.g., mass transit systems such as the Lima Metro), dams, hydroelectric plants, water supply and sewage projects, excavation, structural concrete construction and tunneling. Our civil construction projects are generally large and complex, requiring the use of large construction equipment and sophisticated managerial and engineering techniques.

Electromechanic Construction

Our electromechanic construction activities include the construction and assembly of concentrator plants, pipelines, transmission lines, gas and oil networks, and substations, predominantly for energy projects and industrial plants.

48

Engineering Services

Our engineering activities consist of a broad range of services relating to engineering, supervision, geometrics and environmental consultancy, including pre-investment studies, pre-feasibility studies, process design, project development, supervision of executive designs and construction management, including construction site reviews.

Building Construction

Through our building construction activities, we respond to the demands of the Peruvian real estate market with a focus on the construction of hotels, affordable housing projects, residential buildings, office buildings, shopping centers, and industrial plants.

Other Services

The other services we provide include procurement services, maintenance of plants and industrial facilities and rental of construction equipment.

Major Projects

We have played an active role in the development of the infrastructure sector in Peru, as well as other countries in Latin America, including the construction of roads, hotels, hospitals, shopping centers, housing developments, concentrator plants, hydroelectric power plants, thermal power plants and transmission lines as well as water supply and sewage projects, irrigation projects and dam building, among others. Throughout our history, we have participated, on our own or through minority or majority interests in joint operations, in a diverse range of landmark projects, including the following:

• in 1948, Talara city in northern Peru for the International Petroleum Company, consisting of 2,000 homes, schools, churches, a movie theater and airport;

• in 1950, a 430 km stretch of the Panamericana Sur highway;

• in 1952, the Rebagliati hospital, the largest public hospital in Peru;

• in 1961, the Jorge Chavez International Airport, Peru’s first international airport, located in Lima;

• in 1988, the Chavimochic irrigation project, the most significant irrigation project in Peru;

• in 1992, the Four Seasons Hotel in Mexico City, Mexico;

• in 1995, the U.S. Embassy in Peru;

• in 2004, the Ralco hydroelectric power plant in Chile;

• in 2004, the gas fractionation plant and, in 2008, its expansion for Consorcio Camisea, Camisea project, the largest energy project in Peru’s history;

• in 2005, the Cerro Verde mine concentrator plant for Phelps Dodge; in 2008, the Cerro Corona concentrator plant for GoldFields;

• in 2008, the Parque Agustino real estate development project, the first major affordable housing project in Peru, which consists of 3,400 units;

• in 2009, the Westin Lima Hotel, one of the tallest buildings in Peru;

49

• in 2010, the Melchorita liquefaction plant for Peru LNG, Camisea project;

• in 2010, the Gran Teatro Nacional, the most modern theater in Peru;

• in 2011, the Pueblo Viejo Mine concentrator plant for Barrick Gold Corp. in the Dominican Republic;

• in 2011, the first stretch of Line One of the Lima Metro for the Peruvian Ministry of Transport and Communications;

• in 2012, for project manager Bechtel, the Antapaccay copper concentrator developed by Xstrata Copper, the world’s fourth largest copper producer;

• in 2013, expansion of the plant for Cementos Lima, the largest cement producer in Peru;

• in 2014, the second stretch of Line One of the Lima Metro for the Peruvian Ministry of Transport and Communications;

• in 2014, construction of the Nueva Fuerabamba city, an integral real estate development project for the population surrounding the Las Bambas mining project;

• in 2014, construction of a primary crusher for Mina Caserones, developed by Minera Lumina Copiapo, which is expected to have a daily production capacity of 144,230 tonnes;

• in 2015, construction of a copper concentrator plant for the Las Bambas mining project, managed by Bechtel and developed by Xstrata Copper;

• in 2015, expansion of the process plant for the Cerro Verde mine, one of the biggest concentrator plants in Latin America;

• in 2015, engineering, procurement and construction of Guyana Goldfields’ Aurora gold project in Guyana, with the scope of works including a 1.75 Mt/a processing plant, power station and integration management;

• in 2015, design, engineering, procurement and construction of a new stock pile and 10,000 conveyor belts for the Escondida Mine, managed by Bechtel;

• in 2016, engineering, procurement and construction of the 510 MW Cerro del Águila S.A. hydroelectric plant for IC Power, which represents approximately 10% of Peru’s installed generation capacity;

• in 2016, engineering, procurement and construction of La Chira, a waste water treatment plant for the city of Lima for which we also have the concession through a joint operation with Acciona Agua;

• in 2016, engineering, procurement and construction of a concentrator plant for the La Inmaculada silver and gold project, developed by Hochschild Mining, with a daily processing capacity of 3,500 tonnes;

• in 2017, prefabrication of certain products for the modernization of the Talara refinery in Peru;

• in 2017, various urban and industrial projects in the Lurín district of Lima, Peru, including moving earth for a road platform, a secondary network for potable waters and sewage, and electrical distribution networks;

• in 2017, construction of a 20-story residential building on the Pezet Avenue of Lima;

• in 2017, construction of a pavilion at the Universidad del Pacifico, Peru;

50

• in 2017, construction of a multi-use hall at the Universidad ESAN in Peru;

• in 2018, construction and rehabilitation of an expressway known as Línea Amarilla for Vinci;

• in 2018, construction and design of the Talbot project, a luxury business complex consisting of offices and a hotel with state-of-the-art technology in Lima;

• in 2018, execution of civil works and assembly of structures for the wet area of the Toquepala mine in Southern Peru;

• in 2019, execution of civil works in the Quellaveco mine for AngloAmerican in Peru;

• in 2019, civil works for a modernization project in the Aceros Arequipa plant for Aceros Arequipa Corporation in Peru;

• in 2019, rehabilitation of the runway of the Ayacucho airport;

• in 2019, structural reinforcement project in Plaza del Sol office building in Lima;

• in 2019, construction and rehabilitation of a highway that crosses Lima, Huacho and Pativilca;

• in 2019, ball mill stator replacement in Antamina, located in Ancash, Peru; and

• in 2019, construction of a new water recirculation system and implementation of the north branch for the transfer of tailings in Antofagasta, Chile.

We currently have a diversified portfolio of ongoing projects, on our own or through majority or minority interests in joint operations, in a wide range of sectors in Peru and the other countries where we operate, including the following:

• construction of a hospital for cancer patients in Lima, Peru, which is scheduled to be completed in the first half of 2020;

• construction of the Vistamar hotel with two buildings in Miraflores, which is scheduled to be completed in October 2020;

• construction of a luxury Ibis Hotel in San Isidro with 9 floors and 2 basements, which is scheduled to be completed in August 2020;

• execution of electromechanical and civil works in the construction of the Mina Justa mine for Marcobre, which is scheduled to be completed in August 2020;

• assembly of mechanical and electrical equipment for the modernization project in the Aceros Arequipa plant for Aceros Arequipa Corporation in Peru, which is scheduled to be completed in October 2020;

• construction of tunnels to transport thick mineral and mineral waste in Moquegua, Peru, which is scheduled to be completed in September 2020;

• crushing and transport of material in Minera Spence in Chile, which is scheduled to be completed in June 2020;

• construction of a hotel in Lince, Peru, which is scheduled to be completed in April 2021;

51

• execution of complementary works for the auxiliary units of the Talara refinery for Cobra Perú (three contracts), which is scheduled to be completed during the first half of 2021;

• construction of the Concentrator plant in Moquegua, Perú, which is scheduled to be completed in July 2021;

• pebble grinding and crushing construction of the Quebrada Blanca 2 concentrator for Minera Teck Quebrada Blanca in Chile, which is scheduled to be completed in May 2021; and

• electromechanical civil assembly of the water treatment plant, cooling towers, turbogenerators and evaporators for the map project for Celulosa Arauco Constitución in Chile, which is scheduled to be completed June 2021.

Clients

We believe that we have developed long-term relationships with many clients as a result of our performance over the years and are focused on the successful and on-time execution of complex projects, through our “deliver before deadline” and “lean construction” initiatives. Our extensive experience of operational excellence has allowed us to gain deep market knowledge and expertise, which help us better serve our clients. The principal clients of our E&C segment include renowned domestic and multinational mining, power, oil and gas, transportation and infrastructure development companies, such as AngloAmerican, Southern Peru, Cobra Perú, Marcobre and Corporación Aceros Arequipa, Compañía Minera TECK Quebrada Blanca S.A., Minera Spence S.A., ENAP Refinerías and Minera Escondida LTDA, among others.

Project Selection and Bidding

We win new engineering and construction contracts through private and public bidding processes or direct negotiation, from a variety of sources, including potential client requests, proposals from existing or former clients, opportunities sought by our commercial team and from requests by the Peruvian government. Approximately 99.9%, 82.5% and 97.3% of our 2019, 2018 and 2017 revenues in our E&C segment, respectively, came from private-sector contracts. The Peruvian government and its agencies typically award construction contracts through a public bidding process conducted in accordance with the Peruvian State Contracting Law (Ley de Contrataciones del Estado). In the private sector, in addition to obtaining new projects, another important source of revenue involves increases in the scope of work to be performed in connection with already existing projects. These arrangements are typically negotiated directly with the client, often during the course of the work we are already performing for that client.

We have a designated team that oversees the management of project proposals and a commercial team that reviews and evaluates potential projects in order to estimate costs. We also have a business development committee, which makes decisions about whether or not to apply for projects. In considering whether to bid for a potential project, we principally consider the following factors: competition and the probability of being awarded the project; project size; the client; our experience undertaking similar projects; and the availability of resources, including human resources. As part of the project selection process, our commercial team performs a detailed cost analysis utilizing sophisticated software we developed to assist in determining whether the project is viable and cost-effective. If we choose to pursue a project, a budget leader is assigned to prepare the offer that is eventually presented to our potential client.

Despite the budgeting risks generally associated with engineering and construction contracts, our management believes that our experience generally allows us to estimate our project costs accurately. Our project management teams also periodically review project budgets for inconsistencies between budgeted and actual costs in order to recover for cost variations through contract renegotiation. Budgeting risks are also mitigated through advance payments. Considering that we receive advance payments for most of our E&C contracts, our E&C projects typically do not require significant working capital investment. Our E&C segment secures financing primarily to purchase machinery and equipment for our construction services.

52

We are required, in the majority of our construction contracts, to provide a performance bond to guarantee project performance and completion, which remain in effect for the contract’s duration. We are also required to provide performance bonds to secure any advance payments provided to us by our clients. These bonds are periodically reduced during the project’s execution in accordance with project advancement. After the expiration of the contract term, we are typically required to provide an additional performance bond that remains valid for one year.

Contracts

We principally enter into four types of engineering and construction contracts:

• Cost-plus fee contracts. The contract price is based upon actual costs incurred for time and materials plus a fee, which may be a percentage of the costs incurred or a pre-determined fee. Sometimes, cost-plus fee contracts include a target price, and a contractual arrangement that determines our responsibility in the event the total cost of the project exceeds the target price or the benefit we receive if the total contract price results in cost savings. Cost-plus fee contracts tend to involve the least budgeting risk for us.

• Unit price contracts. The contract price is based upon a price per unit (i.e., variable quantities of work priced at defined unit rates). Each line item of the project budget, such as cubic meter of earth excavated or cubic meter of concrete poured, has a defined price, but the quantities of the units may vary. Our bid price reflects our estimate of the costs that we expect to incur for each work unit. These contracts typically include an “escalation” clause which is essentially an adjustment mechanism to account for Peruvian inflation.

• Lump-sum contracts. The contract price is fixed. Our bid is meant to cover all costs and include a profit. The principal risk in these types of contracts are errors in calculating our costs, including those of raw materials; miscalculation of the number of units or workers needed to complete the project; unanticipated technical complexities; or other unexpected events or circumstances that may increase our costs.

• Engineering, procurement and construction (EPC) contracts. EPC contracts, known as “single source” or “turn-key” contracts, are also lump-sum contracts. Pursuant to EPC contracts, we provide a broad range of basic and detailed engineering services, including preparation of the technical project specifications, detailed drawings and construction specifications; technical studies; and identification of lists of materials and equipment necessary for the project. These contracts, which we utilize predominantly for our mining contracts, require a high-level of expertise and generally involve the most budgetary risks for us.

For further information, see “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Results of Operations.”

Raw Materials

The principal inputs we use in our E&C segment are, among others, fuel, cement and steel. These and the other products we require in our E&C segment may be subject to the availability of raw materials, such as oil and iron, and commodity pricing fluctuations, which we monitor on a regular basis. We typically aim to enter into master supply agreements for a period of six months to one year. Although we obtain the majority of our inputs needs in Peru, we believe we have access to numerous global supply sources. The availability of these inputs, however, may vary significantly from year to year due to various factors including client demand, producer capacity, market conditions, transport costs and specific material shortages, and we may incur additional costs in obtaining them.

We purchase and lease the equipment we require for our E&C segment business from several local and international suppliers, currently with no significant concentration with any particular suppliers. While we do not have difficulty obtaining the equipment we need, we may face difficulties finding skilled personnel who are able to operate certain equipment and machinery.

53

Competition

We generally compete with some of the largest contractors in Peru and the other countries where we operate. Because the E&C sector is highly competitive, the markets served by our business generally require substantial resources and highly-skilled and experienced technical personnel. The principal competitors of our E&C segment include local companies such as Besalco S.A., Cosapi S.A., San Martín Contratistas Generales, ICCGSA, JJC Contratistas Generales S.A., and international companies such as Techint S.A.C., SSK Montajes e Instalaciones S.A.C., Skanska del Perú S.A., Mota-Engil Peru S.A., Salfacorp S.A., OHL, Acciona, Astaldi, Grupo FCC, Ismocol, Termotecnica, Masa, Thiess and Redpath, among others. For certain projects, due to the size of the project, expertise required and other factors, we may choose to partner with our competitors, including the aforementioned companies.

Competition for our E&C segment is driven by performance, skill and project execution capabilities for completing complex projects in a safe, timely and cost-efficient manner, as well as price.

Infrastructure

We are an important toll road concessionaire in Peru, operating three toll roads. Moreover, we are the concessionaire for the Lima Metro, the largest mass-transit rail system in Peru, and a waste water treatment plant. Additionally, we operate ten multiple fuel storage facilities, four producing oil fields under long-term government contracts and we own a gas processing plant. Also, we provide services to maintain and operate different infrastructure projects.

The table below sets forth selected financial information for our Infrastructure business segment.

	As of and for the year ended December 31,
	2017			2018			2019			2019
	(in millions of S/, except as indicated)									(in millions of US$)(1)
Revenues		1,447.9			1,883.3			1,587.3			478.5
Net profit		129.3			184.0			112.1			33.8
Net profit attributable to controlling		103.8			152.3			81.3			24.5
EBITDA		300.9			411.5			355.5			107.2
EBITDA margin		20.8	%		21.8	%		22.4	%		—
Backlog (in millions of US$)(2)		544.8			520.8			—			553.9
Backlog/revenues ratio(2)		1.2x			0.9x			—			1.16x

(1) Calculated based on an exchange rate of S/3.317 to US$1.00 as of December 31, 2019.

(2) For more information on our backlog, see “—Backlog.” Does not include our Norvial toll road concession or our Energy line of business and our jointly. Backlog is calculated as of the last day of the applicable year. Revenues are calculated for such year and converted into U.S. dollars based on the exchange rate published by the SBS on December 31 of the corresponding year. Includes revenues only for businesses included in backlog.

Our strategy is to pursue concessions with the potential to generate business opportunities across our organization. Once we obtain a concession, our goal is to be involved virtually in all aspects of project execution through the participation of our different business segments, from the design and construction to the operation and maintenance of the infrastructure asset.

Through our Infrastructure segment we participate in a number of joint operations with the objective of bidding for government concessions or other long-term contracts. When bidding, we occasionally look for partners to reduce our risks and achieve the level of expertise needed to meet the demands of each particular project.

54

The following table shows selected information about our current concessions and long-term contracts as of December 31, 2019.

Project	Year Granted		Initiated Operations		Expiration		Characteristics	% Owned by Us			Status
Toll Roads:
Norvial(1)		2003		2003		2028	183 km		67.0	%		Operating
Survial		2007		2008		2032	750 km		99.9	%		Operating
Canchaque		2006		2010		2025	78 km		99.9	%		Operating
Mass Transit:
Lima Metro		2011		2012		2041	33.1 km		75.0	%		Operating
Water Treatment:
La Chira		2010		2016		2037	Avg. treatment capacity of 6.3 m3/sec (expected)		50.0	%		Operating
Energy:
Oil Production (2) Block I		1995		1995		2021	Avg. daily production of 727 bbl (2018)		100.0	%		Operating
Block V		1993		1993		2023	Avg. daily production of 107 bbl (2018)		100.0	%		Operating
Block III		2015		2015		2045	Avg. daily production of 712 bbl (2018)		100.0	%		Operating
Block IV		2015		2015		2045	Avg. daily production of 1,898 bbl (2018)		100.0	%		Operating
Gas Processing(3)		2006		2006		N/A	Avg. daily processing capacity of 44 MMcf (2018)		100.0	%		Operating
North and Central Fuel Terminals		2014		2014		2034	Aggregate storage capacity of 2.2 MMbbl		50.0	%		Operating

(1) In June 2018, the company transferred economic rights over 48.8% of the share capital of Norvial to Inversiones en Autopistas S.A. by transferring its Class B shares. Our company continues to possess 67% of voting rights of Norvial and an economic interest of 18.2% of Norvial’s share capital. JJC Contratistas Generales S.A. owns the remaining 33.0%.

(2) Percentages owned in Energy reflect GMP’s ownership. We own 95% of GMP.

(3) We own a gas processing plant and have a long-term delivery and gas processing contract with Enel Generación Piura S.A., which is in force until November 2023.

A consortium including the company held a concession to operate the South Fuel Terminal beginning in 1997. The terminal had an aggregate storage capacity of 1.4 MMbbl, 50.0%. The concession was terminated on November 2, 2019, and the concession reverted to Petroperú.

Additionally, the Chavimochic concession was awarded in 2013 for the design, construction, operation and maintenance of major hydraulic works in northern Peru. Affiliates of Odebrecht own 73.5% of the Chavimochic consortium, with the remaining 26.5% stake held by us. The second phase of the hydraulic works project has not begun as a result of the government’s failure to deliver the required lands for the project. Chavimochic is currently in discussions with the government in relation to the future of the project.

On November 11, 2013, we entered into a memorandum of understanding with Canada Pension Plan Investment Board (“CPPIB”), to create an alliance regarding a partnership to invest in infrastructure projects in Latin America, mainly Peru, Chile and Colombia. This alliance was non-exclusive and investments were determined on a case-by-case basis. In December 2014, we undertook our first large investment with CPPIB, by formalizing an agreement with Enagas (as defined below) and CPPIB whereby we acquired 51% of Tecgas and owner of 100% of the shares of COGA, the operator of TGP, while Enagas acquired 30% and CPPIB maintained 19% of the participation. On April 24, 2017, we sold our interest in COGA.

55

On September 29, 2015, we entered into a memorandum of understanding with Odebrecht Latinvest to participate with a 20% stake in the shareholder equity of Concesionaria Gasoducto Sur Peruano S.A., for an amount of US$215 million (S/722.4 million). On November 2, 2015, we acquired this 20% stake in GSP through a capital increase. The other shareholders are Odebrecht Latinvest with a 55% stake and Enagas with a 25% stake. Concesionaria Gasoducto Sur Peruano S.A. was responsible for the design, financing, construction and operation of the southern gas pipeline, a project which would bring natural gas to the southern region of Peru, particularly to the provinces of Cuzco, Arequipa, Puno and Moquegua. The GSP gas pipeline concession was terminated by the Peruvian Ministry of Energy and Mines on January 24, 2017. For more information, see “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Recent Developments (2017—2020)—Termination of the Gasoducto Sur Peruano Concession.”

Principal Infrastructure Lines of Business

Toll Roads

Peru’s economic development is underpinned by a strong government commitment to infrastructure investment, with a particular focus on improving the country’s road system through the award of new concessions to the private sector. We believe this commitment offers significant opportunities to our Infrastructure segment. The following map shows the location of the Red Vial 5 road in Peru.

Our Infrastructure segment currently has three toll road concessions through our subsidiaries Norvial, Survial and Canchaque. All three toll roads are currently in operation and we have the authorizations, permits and licenses necessary to fulfill our obligations under each concession, including releases of rights of way. All of our toll road concessions have utilized the construction services of our E&C segment and the roads are currently operated and maintained by our subsidiary Concar. The table below sets forth selected financial information relating to our toll roads.

56

	For the year ended December 31,
	2017			2018			2019			2019
	(in millions of S/)									(in millions of US$)(1)
Revenues		263.8			280.8			326.3			98.4
EBITDA		91.1			102.3			77.4			23.3
EBITDA margin		34.5	%		36.4	%		23.7	%		23.7	%

(1) Calculated based on an exchange rate of S/3.317 to US$1.00 as of December 31, 2019.

The charts below set forth the breakdown of our revenues and EBITDA from our toll road concessions for 2019. The charts below set forth the breakdown of our revenues and EBITDA from our toll road concessions for 2019.

Norvial

Under our Norvial concession, we operate and maintain part of the only major highway that connects Lima to the northwest of Peru. This 183-km road, known as Red Vial 5, runs from the cities of Ancón to Pativilca and has three toll stations. The concession was awarded to Norvial in 2003 for a 25-year term. In June 2018, the company transferred economic rights over 48.8% of the share capital of Norvial to Inversiones en Autopistas S.A. by transferring its Class B shares. Our company continues to possess 67% of voting rights of Norvial and an economic interest of 18.2% of Norvial’s share capital. Additionally, JJC Contratistas Generales S.A. owns 16.8% and Inversiones en Infraestructura Perú S.A.C. owns 16.2%.

Norvial’s revenue derives from the collection of tolls. For the Norvial toll road, the toll rate is set out in the Norvial concession agreement and adjusted in accordance with a contractual formula that takes into account the sol/U.S. dollar exchange rate and Peruvian and U.S. inflation. We are required to transfer 5.5% of our monthly toll revenue to the Peruvian Ministry of Transport and Communications and pay a 1% regulatory fee to the Peruvian Supervisory Agency for Investment in Public Transportation Infrastructure.

Our obligations under the concession include expanding the already existing road by, among other things, adding two additional lanes. The first stage of construction was completed in 2008, and the second stage commenced in the second quarter of 2014 and was completed by the end of 2019. The capital investment for the second stage was US$96 million (S/319.2 million).

Unlike other toll roads in Peru, Norvial charges toll fees in both directions. Our road is highly transited both by heavy vehicles, primarily for the purpose of transporting goods, and also by passenger vehicles, which typically use the road to access tourist destinations. In June 2018, we signed an investment agreement with BCI Perú to monetize future dividends of Norvial. The amount of the transaction was US$42.3 million, the proceeds of which were applied to the reduction of indebtedness related to GSP. Recent Peruvian legislation in response to the ongoing COVID-19 pandemic has prohibited certain toll collections. The Peruvian executive branch has initiated an action to declare government prohibitions on collecting tolls unconstitutional, and the company is evaluating its legal options in respect of the same. The following table sets forth average daily traffic volume and average toll fees charged for vehicle equivalents in respect to the Norvial toll road concession for 2017, 2018 and 2019.

57

	For the year ended December 31,
	2017		2018		2019
Average daily traffic by vehicle equivalents(1)		24.965		26.095		26.835
Average toll fee charged for vehicle equivalents (in S/)		14.76		15.22		15.45

(1) Each automobile is counted as one equivalent vehicle and commercial vehicles (such as trucks or buses) represent the number of equivalent vehicles equal to the ratio between the toll rate applicable to commercial vehicles and that which is applicable to one automobile.

The table below sets forth selected financial information relating to Norvial.

	For the year ended December 31,
	2017			2018			2019			2019
	(in millions of S/)									(in millions of US$)(1)
Revenues		149.5			163.1			272.7			82.2
Net profit		49.4			17.2			17.3			5.2
EBITDA		81.4			87.8			94.2			28.4
EBITDA margin		54.5	%		53.8	%		34.5	%		–

(1) Calculated based on an exchange rate of S/3.317 to US$1.00 as of December 31, 2019.

Survial

Under our Survial concession, we operate and maintain a 750 km road from the San Juan de Marcona port to Urcos, Peru, which is connected to an interoceanic road that runs up to the Peruvian-Brazilian border. The road has five toll stations and three weigh stations. The concession was awarded to Survial in 2007 for a 25-year term. We own 99.9% of Survial. The following map shows the location of the road in Peru.

Our obligations under the concession include the construction of the road, which was completed in 2010.

Our revenue from this concession consists of an annual fee paid to Survial by the Peruvian Ministry of Transport and Communications in consideration for the operation and maintenance of the road, which fee can vary depending on the amount of maintenance required due to road damages. In 2017, 2018 and 2019, the fee amounted to US$28.4 million (S/92.2 million), US$8.4 million (S/28.3 million) and US$9.8 million (S/32.4 million), respectively. Our revenue in this concession does not depend on traffic volume.

58

Additional revenues of the concession are generated from the execution of additional works, work we perform as a result of catastrophic events and emergency maintenance. These revenues are billed when approval is received from the grantor and/or the regulator of the work in progress. In 2017, 2018 and 2019, the additional revenues amounted to US$1.0 million (S/0.2 million), US$15.9 million (S/53.8 million) and US$2.0 million (S/6.6 million), respectively.

Canchaque

Under our Canchaque concession, we operate and maintain a 78 km road from the towns of Buenos Aires to Canchaque, in Peru. The road has one toll station. The concession was awarded to Canchaque in 2006 for a 15- year term. We own 99.96% of Canchaque. Our obligations under the concession include the construction of the road, which was completed in 2009. Our revenue from this concession consists of an annual fee paid by the Peruvian Ministry of Transport and Communications in consideration for the operation and maintenance of the road, which fee can vary depending on the amount of road maintenance required due to road wear and tear. In 2017, 2018 and 2019, the fee amounted to US$5.1 million (S/16.6 million), US$7.8 million (S/26.2 million) and US$2.7 million (S/8.8 million), respectively. Our revenue in this concession does not depend on traffic volume.

Additional revenues of the concession are generated from the execution of additional works, work we perform as a result of catastrophic events and emergency maintenance. These revenues are billed when approval is received from the grantor and/or the regulator of the work in progress. In 2017, 2018 and 2019, the additional revenues amounted to US$0.33 million (S/1.1 million), US$1.8 million (S/6.0 million) and US$1.1 million (S/3.7 million), respectively.

Additional Toll Road Projects

We continuously evaluate infrastructure projects and strategically present public-private partnership proposals and participate in bidding processes for road concessions. In 2012 we were awarded, and in 2013 we signed the contract for, a 40-year concession for the 4.6 km Vía Expresa Sur, one of the main roads in Lima, which crosses the city from north to south. The road is intended to connect downtown Lima to Panamericana Sur, a highway that runs from Ecuador to Chile. Our estimate of the total investment under the concession, as submitted in our bid, was approximately US$200 million (S/.672 million). Such investment is intended to be made during the construction phase, which was originally to be completed in 2018. Our revenue would derive from the collection of a toll fee upon completion of the construction. The concession was expected to generate a minimum annual revenue of US$18 million (S/.60.5 million) during the first two years of the concession term, US$19.6 million (S/.65.9 million) for the third year. If in a particular year, our annual revenue would be lower than the minimum guaranteed, the government would compensate us for the difference, up to an amount not to exceed US$10 million (S/.33.6 million). The beginning of the construction phase remains subject to expropriation by the government of the land necessary for the construction of the road.

In June of 2017, we signed Initial and Additional Acts of Suspension of the Concession with the Municipality of Lima to freeze the responsibilities of the government, on the one hand, and the concessionaire, on the other hand, with respect to the concession. The concessionaire continues to act as custodian of certain assets of which it had taken possession and continues to maintain certain performance guaranties in connection with the concession. The government and the concessionaire had agreed to meet and coordinate aspects of the project, with the goal of resuming operations. However, we received a letter from the Municipality of Lima in which the Municipality communicated its desire to cease discussions to relaunch the project. We cannot assure you that this concession contract will be resumed.

Mass Transit

In 2011, we were awarded a 30-year concession for the operation of Line One of the Lima Metro, Peru’s only urban railway system. The concession was awarded to our subsidiary GyM Ferrovías, in which we hold a 75% ownership interest, with the other 25% being held by Ferrovías S.A.C. Our obligations under the contract include:

59

(i) the operation and maintenance of the five trains provided by the government; (ii) the acquisition of 19 new trains on behalf of the Peruvian government, which will be the legal owner of such trains; (iii) the operation and maintenance of the 19 new trains (24 trains in the aggregate); and (iv) the design and construction of the railway maintenance and repair yard, which was built by our E&C segment. The construction of the second stretch of Line One was completed in July 2014, and started operations on July 25, 2014.

We entered into the fourth addendum to the Lima Metro concession contract on July 11, 2016, in order to expand the transportation capacity of Line One. In accordance with the fourth addendum, the expansion project involves: (i) the purchase of 20 new trains with five-car from Alstom; (ii) the purchase of 39 new cars from Alstom, to be coupled with the 19 existing Alstom trains and the 20 new Alstom trains, resulting in a consolidated fleet of 39 Alstom trains with a six-car configuration; and (iii) the expansion and improvement of the existing infrastructure, including revamping and improvement of five stations, improvements in the electrical systems, a new access route to the maintenance workshop and new switches on the main track. The construction of the expansion of the infrastructure was carried out by our E&C segment and completed by the end of 2018, with the additional trains and rail cars delivered by the end of 2019.

As compensation for the investments of the expansion project, we are entitled to receive from the Ministry of Transportation and Communication, an advance payment of 30% of each investment component as well as the balance of 70% of each investment component compensated through an annual payment for complementary investments (pago annual por inversiones complementarias), which represents the unconditional and irrevocable right to receive a series of 56 quarterly payments from the Ministry of Transportation and Communication. In 2016 we received the advance payment of the trains and cars, and in the third quarter of 2017 we received the advance payment corresponding to the infrastructure expansion.

60

The construction of the first and second stretches of Line One was carried out by our E&C segment. The operation and maintenance of the trains is carried out by our subsidiary Concar. The map below shows the route of Line One.

As of December 31, 2019, GyM Ferrovías had spent a total of S/18.2 million (US$5.5 million) in capital expenditures in connection with the Lima Metro.

Our revenue from this concession consists of a quarterly fee that we receive from the Ministry of Transport and Communications based on the kilometers travelled per train and adjusted for inflation, with the fee per kilometer, the number of trains required to be in operation and the number of kilometers that we are required to travel established by the terms of the concession. Our revenues do not depend on passenger traffic volume.

As of December 31, 2019, we operated 44 trains (including four backup trains), which we expect to enable us to travel 4,811,779.65 kilometers per year. The average frequency of the trains is 3 to 6 minutes, depending on the schedule and the fee per kilometer traveled is, for our original 24 trains, S/81.43, and for our 20 newer trains, S/53.19.

61

Pursuant to the concession, we must comply with certain requirements in the operation of the trains. According to the concession, at least 95% of our trains must be running and available for use and not less than 85% of our trains that are available for use must arrive to destination on scheduled time. The table below shows our monthly average results during 2019.

Water Treatment

In 2010, we were awarded a 25-year concession for the construction, operation and maintenance of La Chira waste water treatment plant in the south of Lima. The project is aimed at addressing Lima’s environmental problems caused by sewage discharged directly into the sea. We hold a 50% share in this concession and our partner Acciona Agua holds the remaining 50%. The plant began operations in June 2016.

62

La Chira’s total investment in the concession was S/250 million (US$74.4 million). La Chira is entitled to collect (i) an annual payment for the investment made in the construction of the project for an amount of S/24.2 million (approximately US$7.1 million), and (ii) and annual payment for the operation and maintenance of the project for an amount of S/6.8 million. These fees are paid by Sedapal S.A., the public utility company responsible for the supervision of the water service in Lima, for a period of 25 years. We funded our construction costs related to La Chira through the sale of government certificates to financial institutions, and, as a result, will not receive future cash flows from item (i). See “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Factors Affecting Our Results of Operations—Infrastructure.” A joint operation in which our E&C segment participates is undertaking the construction of the waste water treatment plant.

Energy

We currently operate three energy businesses within our Infrastructure segment: Exploration and Production; Natural Gas; and Transport and Distribution. We operate and extract oil from four onshore fields (Block I, Block III, Block IV and Block V) located in the provinces of Talara and Paita in northern Peru. We have two long-term hydrocarbon extraction service contracts with Perupetro, the Peruvian entity responsible for the administration and supervision of all exploration and production contracts in Peru, under which we operate two oil producing fields, Blocks I and V. In addition, we have two long-term license contracts with Perupetro, a state-owned oil and gas company, for two other blocks, Block III and IV, which started operations in April 2015; oil production from these blocks is sold to Petroperú. During 2019, the oil production of our four blocks was approximately 3,654 bbl per day. We also own and operate a natural gas processing plant located in northern Peru, which processes and fractions natural gas liquids and delivers dry gas to a gas-fired power generation company under a long-term processing and fractionation agreement. In addition, we are a 50% partner in Terminales del Perú, a consortium which has a contract with Petroperú to operate and maintain five fuel storage terminals until 2034.

In addition, we are a 50% partner in Oil Tanking Andina Services S.A.C. (“OTAS”). This subsidiary operates a fuel terminal named Terminal Marino Pisco Camisea under a contract subscribed with Pluspetrol to operate an export terminal for gasoline, diesel, propane and butane. Additionally, through OTAS, we are also a 25% partner in Logística Químicos del Sur S.A. (“LQS”), which operates the Terminal de Químicos de Matarani and which dispatched 53,656 tonnes of sodium hydrosulfide for international mining companies in 2018.

The table below sets forth selected financial information relating to our Energy line of business.

	For the year ended December 31,
	2017			2018			2019			2019
	(in millions of S/)									(in millions of US$)(1)
Revenues		436.9			560.5			552.6			166.6
Net Profit		38.1			65.0			52.8			15.9
EBITDA		142.1			178.9			180.8			54.5
EBITDA margin		32.5	%		31.9	%		32.7	%		—

(1) Calculated based on an exchange rate of S/3.317 to US$1.00 as of December 31, 2019.

63

The pie charts below set forth the breakdown of our revenues and EBITDA from our Energy line of business for 2019.

                    Revenues                                                                                            EBITDA

Oil and Gas Production

We operate and extract oil from four mature fields (Blocks I, III, IV and V) located in the provinces of Talara and Paita in northern Peru. Two of these fields, Blocks I and V, are operated under long-term service contracts under which we provide hydrocarbon extraction services to Perupetro. Hydrocarbons extracted from these two blocks belong to Perupetro, which in turn pays us, once a month, a variable fee per barrel of extracted hydrocarbons. This extraction fee is based on a basket of international crude prices and the level of production. The other two fields, Blocks III and IV, are operated under long-term license contracts with Perupetro. The hydrocarbons extracted are owned by our subsidiary GMP, which in turn pays royalties, on a fortnightly basis, to Perupetro, based on the average prices of three international crude oil prices: Fortis, Suez Blend and Oman Blend crudes. Our activities are focused on proved reserves development and production and are conducted in mature oil fields, which have been producing oil for over 100 years in the case of Block I, over 95 years in the case of Block III, over 95 years in the case of Block IV, and over 50 years in the case of Block V. We believe our activities in these fields bear limited exploration risk.

The following table shows selected information about our fields.

Property	Basin		GMP’s Ownership			Expiration		Developed Acres		Undeveloped Acres
Block I		Talara		100	%		2021		25,154		4,110
Block III		Talara		100	%		2045		7,475		80,986
Block IV		Talara		100	%		2045		8,400		64,550
Block V		Talara		100	%		2023		6,320		2,220

Block I:

We operate and extract oil and natural gas from Block I under a 20-year hydrocarbon extraction service contract with Perupetro, which was extended for an additional 10-year term and expires in December 2021. Average daily production during 2019 was 647 barrels of crude oil. We operate 219 wells using various oil extraction systems and operate a network of production batteries and pipelines to collect, measure and deliver oil in fiscalization point close to the Talara refinery. The field is located in the province of Talara, department of Piura, in northern Peru, approximately five miles from the Talara refinery, the second largest refinery in the country. Block I is the oldest oil producing field in Peru and has been producing oil since around 1890.

Block III:

We operate and extract oil and natural gas from Block III under a 30-year license agreement with Perupetro, which expires in April 2045. Average daily production during 2019 was 724 barrels of crude oil. We operate 166 wells using various oil extraction systems and operate a network of production batteries and pipelines to collect, measure and deliver oil in a fiscalization point close to the Talara refinery, which purchases the oil according to a contract based on an average price of three international crude oil prices: Fortis Blend, Suez Blend and Oman crudes, as adjusted by certain factors. The field is located between the provinces of Talara and Paita, department of Piura, in northern Peru, approximately 21 miles from the Talara refinery.

64

Block IV:

We operate and extract oil and natural gas from Block IV under a 30-year license agreement with Perupetro, which expires in April 2045. Average daily production during 2019 was 2,594 barrels of crude oil. We operate 319 wells using various oil extraction systems and operate a network of production batteries and two pipelines to collect, measure and deliver oil in a fiscalization point close to the Talara refinery, which purchases the oil according to a contract based on an average price of three international crude oil prices: Fortis Blend, Suez Blend and Oman crudes, adjusted for costs related to hydrocarbon transportation. The field is located in the province of Talara, department of Piura, in northern Peru, approximately 21 miles from the Talara refinery.

Block V:

We operate and extract oil and natural gas from Block V under a 20-year hydrocarbon extraction service contract with Perupetro, which was extended for an additional 10-year term and expires in October 2023. Average daily production during 2019 in this field was 105 barrels of crude oil. We operate 40 wells in this field using various oil extraction systems. The Block V field is located in the province of Los Órganos, department of Piura, Peru, close to the border with Ecuador. Block V has been producing oil since the 1950s.

The map below shows the geographic location of our oil producing blocks in northern Peru.

For Block I and Block V, we are entitled to a variable fee paid by Perupetro, which is based on the level of production of each field and a price formula that is based on an average price of three international crude oil prices: Fortis blend, Suez blend and Oman crudes, and a discount over this price of approximately of 72% per barrel. For Block III and Block IV, we pay royalties to Perupetro based on an average price of three international crude oil prices: Fortis blend, Suez blend and Oman crudes. The royalties paid to Perupetro were US$18.79 per barrel during 2017, US$23.17 per barrel during 2018 and US$21.13 per barrel during 2019.

During 2017, 2018 and 2019, we received an average revenue (for all blocks) of US$49.19, US$52.38 and US$53.90, respectively, per barrel of extracted oil, which was equivalent to approximately 91.84%, 73.72% and 86.11%, respectively, of average Brent crude oil prices in the same years. We are not committed to provide a fixed volume of oil or natural gas under our four contracts.

65

We produce natural gas as a byproduct of the production of crude oil (an average of 4.8 MMcf per day during 2019). In Block I, we provide natural gas to ENEL (formerly EEPSA) under a “take or pay” contract (an average of 3 MMcf per day during 2019), and we pay to Perupetro a fee which varies depending on market conditions. The additional volume of natural gas extracted is sent to our Pariñas plant to be processed and commercialized as liquid natural gas. In Block V, we reinject the natural gas produced back into the wells. In Block III, we use part of the produced gas as fuel to operate wells equipment (pumping units) and we are looking for a market to sell the excess. In Block IV, we also use a certain volume of gas as fuel, and the residual volume since November 2019 is also sent to our Pariñas plant to be processed and commercialized as liquid natural gas. Our revenues for the sale of natural gas are not material relative to our oil production revenues.

Estimated Proved Reserves:

The following table sets forth estimated proved crude oil and natural gas reserves in Blocks I, III, IV and V as of December 31, 2019. We have only included estimates of proved and have not included any estimates of probable and possible reserves.

	Crude Oil (Mbbl)		Natural Gas (MMcf)		Crude Oil Equivalents (MBoe)
Block I:
Proved developed producing		467.10		4,045.7		1,186.3
Proved developed non—producing		38.2		—		38.2
Proved undeveloped		—		—		—
Total proved reserves		505.3		4,045.7		1,224.5
Block III:
Proved developed producing		2,593.9		—		2,593.9
Proved developed non—producing		22.4		—		22.4
Proved undeveloped		11,467.4		—		11,467.4
Total proved reserves		14,083.7		—		14,083.7
Block IV:
Proved developed producing		6,963.9		10,641.0		8,855.6
Proved developed non—producing		126.6		194.0		161.1
Proved undeveloped		6873.1		10,835.0		8,799.3
Total proved reserves		13,963.6		23,424.3		17,816.0
Block V:
Proved developed producing		1,391.1		—		1,391.1
Proved developed non—producing		—		—		—
Proved undeveloped		—		—		—
Total proved reserves		1,391.1		—		1,391.1
Total:
Proved developed producing		11,415.9		14,686.7		14,027.0
Proved developed non—producing		187.2		194.0		221.7
Proved undeveloped		18,340.6		12,589.3		20,578.6
Total proved reserves		29,943.7		27,470.0		34,827.3

Proved reserves are those quantities of oil and natural gas which, by analysis of geosciences and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations. The term “reasonable certainty” implies a high degree of confidence that the quantities of oil and/or natural gas actually recovered will equal or exceed the estimate. To achieve reasonable certainty, we employed methodologies that have been demonstrated to yield results with consistency and repeatability. The methodologies and economic data used in the estimation of the proved reserves in the fields include, but are not limited to, well logs, geologic maps and available down hole and production data, seismic data, and well test data.

66

Reserve amounts were based on the 12-month unweighted arithmetic average of the first-day-of-the-month Brent crude price for each month in the period January through December 2019, which, pursuant to our contractual agreements, resulted in average oil and gas prices of US$63.11 per barrel and US$4.29 MMcf, respectively, that for the purpose of reserve amount estimation were assumed to remain constant.

Proved undeveloped reserves in the fields as of December 31, 2019 were 20,579 Mboe, consisting of 18,341 MBbl of crude oil and 2,238 Mboe (12,589 MMcf) of natural gas. We estimate that during 2019: proved undeveloped reserves increased by 549 Mboe of crude oil; approximately 759 Mboe of proved undeveloped reserves of crude oil were converted into proved developed reserves; and natural gas reserves decreased 209 Mboe (1,177 MMcf). Capital expenditures made during 2019, for both drilling activities and workovers, to convert undeveloped reserves to proved developed reserves, amounted to approximately US$24.4 million (S/80.9 million).

The principal changes in proved undeveloped reserves during 2019 were:

• Crude oil reserves: proved undeveloped crude oil reserves increased 759 Mbbl during 2019, as follows:

• an increase of 1,023 MBbl due to a drilling campaign in Block IV;

• a decrease of 264 MBbl due to a revision of type curve in Block III; and

• Associated natural gas reserves increased 209 Mboe (1,177 MMcf) during 2019 due to the adjustment of the oil-gas ratio (GOR).

For changes in proved developed and undeveloped reserves from December 31, 2018 to December 31, 2019, see supplementary data (unaudited) annexed to our audited annual consolidated financial statements included in this annual report.

Qualifications of Technical Persons and Internal Controls Over Reserves Estimation Process:

The reserves estimates shown in this annual report have been prepared internally by our engineers in accordance with the definitions and guidelines of the SEC. Our reserves are estimated at the property level and compiled by our engineering staff. Our engineering staff interacts with our internal staff of operations engineers and geoscience professionals and with accounting employees to obtain the necessary data for the reserves estimation process. Our reservoir engineers and geoscience professionals have worked to ensure the integrity, accuracy and timeliness of the data, methods and assumptions used in the preparation of the reserves estimates. Mr. Luis Huaranga and Javier Portuguez are our Reservoir Engineers. The reserves estimate report was submitted to our Committee of Reserves, which is formed by Mr. Anthony Alfaro (Exploration and Production Manager), Mr. Iván Miranda (Exploration and Production Technical Manager), Mr. Jose Pisconte Lomas (Chief of Geology), and Mr. Manuel Gomez (Chief of Reservoir Engineering). Mr. Huaranga holds a Petroleum Engineering degree from Universidad Nacional de Ingeniería in Lima, Peru and has 23 years of experience, developed as a reservoir engineer at Pluspetrol, Petrobras, and Repsol. He has been working for GMP since September 2016. Mr. Portuguez holds a Petroleum Engineering degree from Universidad Nacional de Ingeniería in Lima, Peru and has 26 years of experience, developed as a production and reservoir engineer at Mercantile and Interoil Peru. Mr. Gomez holds a Petroleum Engineering degree from Universidad Nacional de Ingeniería in Lima, Peru and has 12 years of experience, most of it as drilling, completion, stimulation, and reservoir engineer. Mr. Pisconte Lomas, holds a Geologist Engineering degree and a Regional Geology Master’s degree from Universidad Nacional Mayor de San Marcos and has 27 years of experience in the oil industry. Mr. Miranda holds a degree in Petroleum Engineering from Universidad Nacional de Ingeniería in Lima and a Petroleum Engineering Master’s degree from Texas A&M University of Texas—USA, and has 35 years of experience in the oil industry developed at Petroperú, Unipetro ABC, and GMP. Mr. Alfaro holds a Petroleum Engineering degree from Universidad Nacional de Ingeniería in Lima, Peru, Master’s degree in Business Administration from Universidad Rafael Belloso Chacin in Maracaibo, Venezuela, a Master’s degree in Projects Management an Administration from Universidad de Ciencias Aplicadas in Lima, Peru and has 36 years of experience developed at Petroperú, Perez Companc Peru and Argentina, Petrobras Venezuela and Peru, Grupo Synergy E&P Ecuador, and GMP.

67

Production, Revenues, Prices and Costs:

The following table sets forth information regarding our production, revenues, prices and production costs for 2017, 2018 and 2019.

	For the year ended December 31,
	2017		2018		2019
Production volumes(1):
Crude oil (Mbbl)
Block I		310.9		262.8		236.3
Block III		267.8		275.8		264.3
Block IV		530.9		755.9		946.8
Block V		36.2		39.9		38.4
Total (crude oil Mbbl)		1,145.8		1,334.4		1,485.8
Natural gas (MMcf)
Block I		2,979.0		2,228.8		1770.7
Block III		—		—		—
Block IV		—		—		—
Block V		—		—		—
Total (natural gas MMcf)		2,979.0		2,228.8		1,770.7
Crude oil equivalents (Mboe)		529.5		396.2		314.8
Total Company		1,675.3		1,730.6		1,800.6
Average sales prices(2):
Crude oil (US$/bbl)		49.81		64.72		61.19
Natural Gas (US$/Mcf)		4.07		4.52		4.29
Crude oil equivalents (US$/boe)		41.95		55.64		53.90
Costs and expenses(2):
Production expenses (US$/boe)		17.35		18.11		17.66
Royalties (US$/boe)		9.27		17.80		16.99
General and administrative expenses (US$/boe)		2.02		2.37		2.69
Depreciation, depletion, amortization and accretion expenses (US$/boe)		8.99		10.19		10.47

(1) Hydrocarbons extracted from Blocks I and V belong to Perupetro, which in turns pays us a per barrel fee for extracted hydrocarbons. Hydrocarbons extracted from Blocks III and IV belong to GMP, which in turn pays a royalty to Perupetro for the amount of extracted hydrocarbons.

(2) Crude oil sales volume differs from total production volume due to operational circumstances such as the inventory of product stored in our field batteries at the end of each monthly measurement. “Average sales prices” refers to the fees received in consideration for our extraction services, which do not equal the sales prices of crude oil. Average sales prices have been calculated using a basket price formula according to the service and license contracts of each block. Such formulation is at a discount to global oil prices for Blocks I and V, and for Blocks III and IV we pay royalties on the oil extracted. Per unit costs have been calculated using sales volumes.

Acreage, Productive and Development Wells, Drilling:

The following table sets forth certain information regarding the total developed and undeveloped acreage as of December 31, 2019.

Formation	Developed Acreage		Undeveloped Acreage
Block I
Pariñas		2,271		70
Mogollón		2,583		320
Basal Salina		1,850		100
Mesa		1,485		1,650
Total Block I		8,189		2,140

68

Formation	Developed Acreage		Undeveloped Acreage
Block III
Salina Mogollón		7,475		3,983
Amotape		1,750		2,370
Total Block III		9,225		6,353
Block IV
Pariñas		4,155		3,402
Palegreda		5,292		3,951
Mogollón		1,470		2,606
Total Block IV		10,917		9,959
Block V
Verdún		530		650
Ostrea		175		115
Mogollón		1,350		120
Total Block V		2,055		885
Total		30,386		19,337

As of December 31, 2019, we had a total of 744 producing wells. Our wells are oil wells, many of which also produce natural gas. We do not have interests in wells that only produce natural gas. The following table shows the number of development and exploratory wells drilled during 2017, 2018 and 2019 in Blocks I, III, IV and V.

	For the year ended December 31,
	2017		2018		2019
Development Wells
Productive		22		33		33
Dry		—		—		—
Total		22		33		33
Exploratory Wells
Productive		1		—		—
Dry		—		1		—
Total		1		1		0

During 2017, 2018 and 2019 we invested US$16.5 million (S/53.6 million), US$20.2 (S/68.4) and US$23.8 million (S/78.95 million), respectively, in drilling activities. During 2019, we drilled a total of 33 wells in Block IV (all of them are productive wells)

Under the terms of our agreements with Perupetro, at the time the contract terminates, we are required to close non-producing wells that we have drilled. As of December 31, 2019, we estimated that we will be required to close 62 wells in Block I in December 2021 and 6 wells in Block V in October 2023, 40 wells in Block III and 50 wells in Block IV in December 2045. We have created a provision in our financial statements for the costs relating to those well closings. See note 5.1(d) to our audited annual consolidated financial statements included in this annual report.

Gas Processing Plant

We own a gas processing plant located 7 km north of the city of Talara in Piura, Peru. We currently have under a long-term delivery and gas processing and fractioning contract with Enel Generación Piura (formerly known as EEPSA), according to which Enel Generación Piura delivers wet natural gas that it purchases from onshore and offshore gas operators in the area. We then process and fraction the gas into two products: (i) dry natural gas, which can be used as fuel in Enel Generación Piura’s gas-fired turbine; and (ii) natural gas liquids, which are sold in the Peruvian market. Under the terms of the agreement, we are responsible for all operating costs of the gas processing plant but are also entitled to keep revenues from the sale of the natural gas liquids to third parties after payment of a variable royalty, based on the volume of gas processed, to Enel Generación Piura. Our current gas processing and fractionation contract with Enel Generación Piura expires in 2023.

69

Our gas processing plant has the capacity to process up to 44 MMcf per day. We processed 30.57 MMcf per day during 2017, 30.12 MMcf per day during 2018 and 30.52 MMcf per day during 2019. Approximately 91% of the volume processed by our gas processing plant depends on the gas volumes provided by Enel Generación Piura for processing and use on its gas-fired turbines. These volumes vary per month and depend upon the power dispatch curve of Enel Generación Piura among Peruvian power generation plants. In rainy months (December to April) where hydroelectric power generation in Peru is typically higher, gas volumes demanded by Enel Generación Piura are lower than in dryer months (May to November) in which activity of thermal generators tends to be higher. Approximately 6% of the volume processed by our gas processing plant depends on the volumes of gas extracted by GMP in Block I, approximately 7% depends on the volumes of gas extracted by GMP in Block IV and approximately 1% depends on the volumes of gas provided by CNPC, which we process and commercialize as liquid natural gas.

Fuel Storage Terminals

We are a 50% partner in Consorcio Terminales with a Peruvian affiliate of Oiltanking GmbH, one of the world’s largest operators of independent terminals for bulk liquid storage. Consorcio Terminales was first awarded a concession for the operation of the South Fuel Terminal in 1997. In June 2014, Terminales del Perú, a new consortium that included our subsidiary GMP and Oiltanking Peru, was awarded a concession for the operation of the North and Central Fuel Terminals for Petroperú. The contracts have 20-year terms and consist of the operation of four terminals in the north and one terminal in the center of the country, providing storage and dispatching bulk liquid fuel. The total amount of the committed investment for both projects is approximately US$37.2 million (S/125 million), while the total amount of the additional investment, which is expected to be reimbursed to the company, is approximately US$186 million (S/625 million). In November 2018, Petroperú initiated a public bidding for the operation of the South Fuel Terminal, which was cancelled by Petroperú in May 2019. There was no winner in the public bidding for the operation of the South Fuel Terminal, and the contract of Consorcio Terminales was extended through contract amendments, the latest of which terminated on November 2, 2019, and the concession reverted to Petroperú.

Our open-access terminals offer our customers dependable and critical handling and storage services for refined petroleum liquid products, maintaining high quality, safety and environmental standards. We provide storage, handling and loading and uploading services for a broad range of refined petroleum liquid products, including gasoline, aircraft fuel, diesel and heavy fuel oil. We deliver the liquids into two types of transportation systems, railroad cars and cistern trucks. Because of the strategic location of our assets, our deep-water access, inland terminals and our aggregate storage capacity of 2.5 MMbbl in the North and Central Terminals, we believe that we are well-positioned to cover the needs of our clients, the two principal refineries in Peru. The map below shows the location of each of our fuel storage terminals in Peru.

70

Under the contracts, Consorcio Terminales and Terminales del Perú received revenues paid in connection with monthly reserved volume in tanks for refined crude products (storage fee) and for volumes loaded and delivered into railroad cars or cistern trucks to each terminal (throughput fee). The storage fee per barrel, is based upon reserved volumes whether they are received or not. The throughput fee is paid based on effective barrels delivered per month. During 2017, 2018 and 2019, Consorcio Terminales and Terminales del Perú generated revenues of US$78.84 million (S/255.8 million), US$82.5 (S/278.9 million) and US$79.7 million (S/264.3 million) (we are entitled to 50% of the joint operation revenues), respectively. Under the contracts, Consorcio Terminales and Terminales del Perú are responsible for paying the fuel terminals operating and maintenance costs and also paying a royalty fee to Petroperú based on effective barrels delivered each month.

At the current stage of the contracts, any capital expenditure we invest in the fuel storage terminals can be recouped from any present and future royalties we owe to Petroperú.

Other Terminal Operations

We are a 50% partner in Oiltanking Andina Services S.A.C. (“OTAS”). This subsidiary operates a fuel terminal named “Terminal Marino Pisco Camisea” under a contract subscribed with Pluspetrol to operate an export terminal for gasoline, diesel, propane and butane. In 2019, this terminal dispatched 24.3 million barrels and received 1.3 million barrels of natural gas liquids. Additionally, through OTAS, we are also a 25% partner in LQS, which operates the “Terminal de Químicos de Matarani,” which dispatched 58,639 tonnes of sodium hydrosulfide for international mining companies in 2019. During 2017, 2018 and 2019 these activities generated revenues in the aggregate of approximately US$6.6 million (S/21.4 million), US$6.6 million (S/22.3 million) and US$6.9 million (S/22.9 million), respectively.

Operation and Maintenance of Infrastructure Assets

We began providing our operation and maintenance of infrastructure assets services in 1994 when we were awarded the concession for the Arequipa Matarani highway in southern Peru. With this experience, in 2003, we began providing operation and maintenance services to Norvial. In 2007, the Peruvian government initiated Proyecto Peru, a program aimed at maintaining roads not under concession to ensure their longevity. Proyecto Peru allowed us to develop new business opportunities providing maintenance services to more than 4,000 km of public roads in Peru. We believe the experience we have gained operating highway and transportation concessions positioned our company to capitalize on the Peruvian government’s initiatives to increase infrastructure development.

Our revenue in the operation and maintenance of infrastructure assets is generated either from fees we charge to Norvial, Survial, Canchaque, Pasco, Chinchaypujio, Chuquibambilla, Cora and the Lima Metro to operate and maintain our concessions or from government payments through maintenance service contracts we have been awarded. As depicted in the chart below, we operate and maintain 2,247.20 km of Peruvian roads and highways, including our own highway concessions, in addition to the Lima Metro.

71

Operation and Maintenance of Infrastructure Assets

Total 2,247.20 KM

The table below sets forth selected financial information for our operation and maintenance of infrastructure assets activities.

	For the year ended December 31,
	2017			2018			2019			2019
	(in millions of S/)									(in millions of US$)(1)
Revenues		378.3			452.3			307.0			92.6
Net profit (loss)		16.9			2.4			(21.9	)		6.6
EBITDA		34.1			19.2			(2.0	)		(0.6	)
EBITDA margin		9.0	%		4.2	%		0.7	%		—

(1) Calculated based on an exchange rate of S/3.317 to US$1.00 as of December 31, 2019.

72

The below map illustrates the roads in Peru for which we currently provide operation and maintenance services.

We provide the following road operation and maintenance services:

• Routine Maintenance. These services aim to preserve roads through ongoing maintenance, including: road demarcation; cleaning; drainage; road fissure treatment, which seals cracks in roads to prevent water infiltration; slurry sealing; and micro-paving, which seals asphalt to prevent aging and improve resistance to water and surface wear.

• Periodic Maintenance. These services entail activities that are performed periodically, intended to prevent the occurrence or exacerbation of defects, conserve the structural integrity of roads and correct major defects.

• Emergency maintenance. This maintenance work is performed whenever the need arises, such as when natural disasters damage road surfaces.

We also administer toll stations and weighing stations; offer road patrolling services; operate assistance call centers; and provide emergency medical services.

The operation and maintenance services we provide to the Lima Metro aim to preserve the mass transit system through ongoing maintenance, including cleaning of the trains and stations and providing train operators, among other services.

With respect to operation and maintenance contracts with the Peruvian government, we obtain new contracts through public bidding. With respect to contracts with our Infrastructure segment, we participate in direct negotiation. Contract length typically ranges from three to five years.

Competition

Our ability to grow through successful bids for new infrastructure concessions or other long-term contracts could be affected as a result of competition. We view our competition as including both Peruvian and international infrastructure concession operators including joint operations with partners with specialized expertise in the relevant sector. Competition varies on a case-by-case basis, depending on the main purpose of the concession.

73

Real Estate

Our Real Estate segment is one of the largest apartment building developers in Peru, in terms of number of units sold and value of sales in 2019, and is focused on the development and sale of affordable housing and housing as well as other real estate projects. Since commencing our operations in 1987, we have developed approximately 1,262,850 m2 of affordable housing (approximately 19,998 units); approximately 392,598 m2 of housing (approximately 1,888 units); approximately 170,416 m2 of office space (approximately 903 offices); and approximately 43,000 m2 of shopping centers (three shopping centers). Moreover, we are currently building approximately 104,953 m2 of affordable housing (approximately 1,713 units) and approximately 12,317 m2 of housing (approximately 146 units). Our Real Estate segment also owns land parcels in Lima, comprising approximately 55 hectares as of December 31, 2019, and we have sold undeveloped land in the past and intend to continue such sales in the future.

The table below sets forth selected financial information for our Real Estate business segment.

	For the year ended December 31,
	2017			2018			2019			2019
	(in millions of S/, except as indicated)									(in millions of US$)(2)
Revenues(1)		647.5			630.1			264.4			79.7
Net profit		117.7			157.8			23.7			7.2
Net profit attributable to controlling		48.6			28.9			(5.0	)		(2.6	)
EBITDA		177.3			241.00			76.2			23.0
EBITDA margin		27.4	%		38.2	%		28.8	%		—
Backlog (in millions of US$)(3)		25.9			57.9			209.9			63.3
Backlog/revenues ratio(3)		0.1	x		0.3	x		0.7	x		—

(1) In 2017, 2018 and 2019 we recognized S/163.1 million (US$50.3 million), S/38.4 million (US$11.5 million) and S/37.4 million (US$11.2 million), respectively, in revenues from land sales.

(2) Calculated based on an exchange rate of S/3.317 to US$1.00 as of December 31, 2019.

(3) For more information on our backlog, see “—Backlog.” Backlog is calculated as of the last day of the applicable period. Revenues are calculated for such period and converted into U.S. dollars based on the exchange rate published by the SBS at such period.

We undertake a significant amount of the activities in our Real Estate segment with partners through financing and commercial arrangements we use to purchase land and to develop real estate projects. See “—Financing.” See also “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Results of Operations—General—Real Estate.” As a result, a significant amount of our net profit in the Real Estate segment is attributable to the non-controlling interest of our partners.

Principal Real Estate Activities

Our real estate developments include the following products:

• affordable housing;

• housing; and

• commercial real estate.

We began developing affordable housing projects in 2001, following the Peruvian government’s efforts to address the country’s housing deficit, particularly for low-income families. We launched the first major affordable housing project in Peru in 2007; Parque Agustino, in Lima’s El Agustino neighborhood. Since 2001, we have completed 18 affordable housing projects. As of December 31, 2019, we are in the process of developing three affordable housing projects, including construction, presales and procuring required authorizations and permits. These projects consist of expansions of projects previously completed by us. Affordable housing consists of apartments,

74

usually ranging between 50 and 72 m2 in size, that are purchased using government-sponsored support programs. The Peruvian government has adopted the Nuevo Crédito MiVivienda and Techo Propio programs, among others, which promote access to affordable housing in Peru by providing government subsidies to individuals for the purchase of homes. In order for a unit to qualify for the Nuevo Crédito MiVivienda program, its selling price must range between S/58,800 and S/310,800. In order for a unit to qualify for the Techo Propio new housing purchase program, its selling price must be less than S/84,100 for a single family home or less than S/105,000 for a multi-family dwelling.

In order to be eligible for an affordable housing subsidy under the Nuevo Crédito MiVivienda program, a purchaser must not own any other home or have benefitted from a housing subsidy program in the past, among other requirements. A purchaser must also provide a down payment between 10% and 30% of the total purchase amount. Housing subsidies under this program fluctuate between S/6,400 and S/17,700 which incentivize purchasers with reduced monthly rates so long as they pay their mortgage loan payments on a timely basis. In order to be eligible for an affordable housing subsidy under the Techo Propio program, a purchaser must have a monthly income that does not exceed approximately S/3,538 and must not have received any other government-sponsored housing benefit in the past, among other requirements. A Techo Propio purchaser must also show proven savings equal to at least 5% of the total purchase amount. Housing subsidies under this program is S/34,4000. Purchasers of subsidized housing under both programs are also not required to pay a value-added tax normally applicable to residential purchases.

We develop substantially all of our affordable housing projects on land purchased from the private sector. To the extent these projects meet the requirements of a particular government subsidy program, purchasers can purchase units with government subsidies. Some of our affordable housing projects, however, such as Parque Agustino, are developed through government bidding processes. Government subsidy programs like Nuevo Crédito MiVivienda and Techo Propio have driven the demand for affordable housing in Peru, which has in turn increased our sales of affordable housing units.

Our housing developments consist of residential buildings comprised of apartments with a mid- to high-price range that do not qualify for government subsidies. Since 1987, we have developed 38 housing developments. As of December 31, 2019, we are developing four housing projects, one of which is in the construction stage, with the other three in the process of obtaining required approvals and permits. Our housing units typically range between 130 and 400 m2 in size.

Substantially all of our affordable housing and housing development projects are located in Lima. We have also purchased land to develop four affordable housing projects in Piura, Chimbote and Huancayo, two cities north of Lima and one in the center of the country. We intend to develop affordable housing projects in other cities outside of Lima.

The table below sets forth number of units sold and not yet delivered and number of units delivered, as well as the value of units sold and our sales revenue for the periods indicated.

	For the year ended December 31,
	2017		2018		2019
Number of Units Delivered(1):
Affordable Housing		1,353		1,232		1,433
Housing		65		44		17
Total		1,418		1,276		1,450
Number of Units Sold and Not Yet Delivered(1):
Affordable Housing		1,152		1,810		1,925
Housing		43		75		11
Total		1,195		1,885		1,936
Total m2 Delivered:
Affordable Housing		78,004		70,986		83,880
Housing		20,978		13,752		1,912
Total		98,982		84,738		85,792
Total m2 Sold and Not Yet Delivered:
Affordable Housing		66,878		107,075		116,327
Housing		12,538		15,440		2,593
Total		79,416		122,515		118,920
Value of Units Delivered (in millions of S/):
Affordable Housing		170		137		196
Housing		221		133		20
Total		391		270		216

(1) We typically pre-sell our affordable housing and housing units before construction begins and continue to sell during construction, although we recognize revenues at the time of delivery of units.

75

We develop and sell office and commercial buildings, such as shopping centers. On certain occasions, we have operated our commercial real estate and later sold it, such as Larcomar, a landmark shopping center which we built in 1998 and sold in 2010. We have also developed commercial real estate buildings in connection with our affordable housing and housing projects, such as the Parque Agustino shopping center. Since 1987, we have developed 16 office buildings, three shopping centers and one medical center.

Land Bank

We typically purchase land to develop real estate projects with the intention to begin construction within a 12- to 18-month period after the purchase of the land. We may also, from time to time, purchase land for subsequent resale. As of December 31, 2019, we owned approximately 95.5 hectares, of which 81.5% is located in Lima and 18.5% outside of Lima. We continually evaluate opportunities to purchase new land for our real estate development projects.

On February 24, 2017, we sold our interest in Project Espacio (formerly known as Cuartel San Martín) to Urbi Propiedades S.A., our partner in the project, for US$50 million (S/168 million). On April 28, 2017, we also sold our interest (approximately 20.8%) in Promoción Inmobiliaria del Sur S.A. (“PRINSUR”) of Inversiones Centenario, which owns approximately 937.7 hectares of undeveloped land also located in Lurín, to our partner Inversiones Centenario S.A.A. for US$25 million (S/84 million). For more information, see “Item 5.A. Operating and Financial Review and Prospect— Operating Results—Recent Developments (2017—2020)—Asset Sales.”

We have a 50.45% interest in Almonte, which owned approximately 77.8 hectares as of December 31, 2019 of undeveloped land in Lurín, located 30 km south of Lima. We previously sold 27 hectares of the land for industrial use. On May 31, 2018, Almonte signed a purchase agreement with PRINSUR for the sale of 420.9 hectares of land by Almonte to PRINSUR for an aggregate amount of US$92.7 million, the final installment of which was paid in February 2020 upon the satisfaction of certain conditions precedent.

Financing

We generally fund land purchases for our housing and commercial real estate projects through cash from our operations. For our affordable housing projects, we generally partner with real estate investment funds and insurance companies that provide between 60% and 70% of the total capital required to purchase the land and cover certain pre-construction costs in exchange for equity in the project. Once we acquire land for a particular real estate development project, we obtain working capital through a credit line from a financial institution, which we utilize to finance additional project needs as they arise. We also obtain financing through pre-construction sales for our affordable housing and housing projects and, to a lesser extent, our commercial real estate projects. Our affordable housing and housing projects generally require less outside financing because they are generally financed with pre-construction sales.

76

Sales and Marketing

We typically pre-sell our affordable housing and housing units prior to and during construction, and use the related proceeds to finance the construction of the units. Our commercial and sales processes differ depending on the type of development and market segment of the development. We primarily sell our real estate development projects through an internal sales force that is assigned to particular projects and, to a lesser extent, external brokers on a non-exclusive, commission-fee basis. Our marketing efforts primarily consist of newspaper advertisements, radio and television commercials, billboards and promotional offers for referrals. We also advertise our real estate projects on our website.

We believe our brand is associated with product quality, professional operations and reliable post-sale customer service. We provide customer service call centers through which residents can report complaints or defects. Engineers respond with site visits, and repairs are made as long as the property continues to be covered by the applicable warranty or guarantee.

For our affordable housing projects, we provide post-sale customer service through our Ayni program, which aims to preserve the long-term value of our affordable housing developments by promoting a cooperative community life. Through this program, we distribute manuals that teach best practices for living in communities, offer leadership workshops, budget workshops, promote small business development, facilitate conflict resolution and provide other services. These services are provided for a six- to eight-month period following project delivery. In 2012, we initiated the Ayni contest for residents of our affordable housing projects with the aim of stimulating the sustainability of their community. Participants present an enhancement project for their community, such as a recreation center, and a jury selects the best project, which we fund and construct.

Competition

The Peruvian real estate development industry is highly competitive. The market is fragmented and no single company has a significant share of the national market. The principal competitors for our Real Estate segment are Paz Centenario Global S.A., Paz Centenario Inmobiliaria, Corporación Líder Perú S.A., Urbana Perú, Los Portales, Imagina Grupo Inmobiliario, ENACORP, Besco S.A. and Gerpal. In the coming years, we expect more competition from domestic and foreign real estate development companies who recognize the growth potential in the Peruvian residential market. The main factors that drive competition are product design and amenities, price, location and post-sale service offerings.

Backlog

We define our backlog as the U.S. dollar equivalent value of revenue we expect to realize in the future as a result of performing work under multi-period contracts that we have entered into. Backlog is not a measure defined by IFRS, and our methodology for determining backlog may not be comparable to the methodology used by other companies in determining their backlog. For contracts denominated in soles or other local currencies, amounts have been converted into U.S. dollars based on the exchange rate published by the SBS, in the case of Peru, or other relevant authority, in the case of other jurisdictions, on December 31 of the corresponding year.

We do not include backlog in this annual report in our Infrastructure segment for: (i) our Norvial toll road concession because its revenues from the concession are derived from toll fees charged to vehicles using the highway, and, as a result, such revenues are dependent on vehicular traffic levels; and (ii) our Energy line of business because: (a) its revenues from hydrocarbon extraction services are dependent on the amounts of oil and gas we produce and market prices, which fluctuate significantly; (b) our revenues from our gas processing plant are dependent on the amount of gas we process and market prices for natural gas liquids, which fluctuate significantly; and (c) our revenues from our fuel storage terminal operation partially depend on the volume of fuel dispatched.

When we present backlog on a segment basis, we do not include eliminations that are included in our consolidated backlog. For a description of how we calculate our backlog, see our segment backlog presented below. We have revised prior backlog data included in this annual report to exclude the presentation of entities that are presented as discontinued operations.

77

Our consolidated backlog as of December 31, 2019 was US$1,396.4 million. We expect to recognize as revenues 71.3% of our backlog by December 31, 2020, 18.7% by December 31, 2021 and 10.0% thereafter. However, the ongoing COVID-19 pandemic and government measures to contain the spread of the virus, which have significantly increased economic uncertainty, may continue to impact our ability to perform our backlog in the short term. As conditions are recent, uncertain and changing rapidly, it is difficult to predict the full extent of the impact of the pandemic on our backlog in the short term. The following table sets forth our consolidated backlog from December 31, 2015 to December 31, 2019.

Backlog (in US$ million)

(1) In the third quarter of 2015, we acquired a 29% participation in the construction consortium of the GSP gas pipeline project, and, as a result, we incorporated US$1.0 billion in backlog. Due to the termination of the GSP gas pipeline concession on January 24, 2017, we have removed US$855 million from the backlog, representing 33.8% of our total backlog as of December 31, 2016.

Our backlog slightly increased in 2019, but may decline in the future, including due to the potential sale of assets. We cannot assure you that we will be able to continue obtaining sufficient contracts in the future in number and magnitude to grow our backlog. Additionally, the number and amounts of new contracts signed can fluctuate significantly from period to period. For example, the third quarter of 2015, we acquired a 29% participation in the construction consortium of the GSP gas pipeline project, and, as a result, we incorporated US$1.0 billion in backlog. Due to the termination of the GSP gas pipeline concession on January 24, 2017, we have removed US$855 million from the backlog, representing 42.5% of our E&C backlog and 33.8% of our total backlog as of December 31, 2016. During 2017 we also removed US$87.5 million from our backlog related to the Chavimochic project. During 2018, we removed from our presentation of backlog CAM, CAM Servicios and Stracon GyM, which we account for as discontinued operations, and Adexus, which we account for as an investment held for sale. For more information, see “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Recent Developments (2017 -2020)—Termination of the Gasoducto Sur Peruano Concession.”

The table below sets forth our ending backlog for 2017, 2018 and 2019 accounting for opening backlog for each year, annual contract bookings and adjustments, cancellations during the year and annual revenues recognized.

	2017			2018			2019
	(in millions of US$)
Opening backlog (end of prior year)		1,677.6			1,244.1			1,257.2
Contract bookings and adjustments during the year		719.9			881.3			1,139.5
Cancellations during the year		—			—			—
Revenues recognized during the year		(1,153.4	)		(868.2	)		(1,000.2	)
Ending backlog (end of current year)		1,244.1			1,257.2			1,396.4

78

The chart below sets forth our consolidated backlog breakdown by end-market, geography and client sector as of December 31, 2019.

Backlog by End-Market   Backlog by Geography  

Backlog by Client Type

The chart below shows the effects on our backlog of our participation in the GSP pipeline concession and the subsequent termination of the concession.

79

E & C Backlog

To include an engineering and construction contract in our backlog, we assume that each party will satisfy all of its respective obligations under the contract. We also make assumptions, in agreement with the client, regarding the total expected contract price in the case of unit price and cost-plus fee contracts and the amount of the contract that will be completed in each year. We adjust our backlog periodically to account for developments related to each project. For projects related to joint operations or equity investments, we only include our percentage ownership of the joint operation’s or equity investment’s backlog. Our E&C segment backlog does not include intersegment eliminations.

Our E&C backlog as of December 31, 2019 was US$910.1 million. We expect to recognize as revenues 85.9% of such backlog by December 31, 2020 and 14.1% of such backlog thereafter. However, the ongoing COVID-19 pandemic and government measures to contain the spread of the virus, which have significantly increased economic uncertainty, may continue to impact our ability to perform our E&C backlog in the short term. As conditions are recent, uncertain and changing rapidly, it is difficult to predict the full extent of the impact of the pandemic on our backlog in the short term. The following table sets forth of our E&C backlog from December 31, 2015 to December 31, 2019.

E&C Backlog (in US$ million)

80

The following pie charts set forth our E&C backlog breakdown by end-market, geography, client sector and contract type as of December 31, 2019.

The table below sets forth our ending E&C backlog for 2017, 2018 and 2019 accounting for opening backlog for each year, annual contract bookings and adjustments, cancellations during the year and annual revenues recognized.

	2017			2018			2019
	(in millions of US$)
Opening backlog (end of prior year)		1,157.6			772.5			782.6
Contract bookings and adjustments during the year		357.7			582.6			881.5
Cancellations during the year		—			—			—
Revenues recognized during the year		(742.8	)		(572.5	)		(754.0	)
Ending backlog (end of current year)		772.5			782.6			910.1

Infrastructure Backlog

In reflecting an Infrastructure contract in our backlog, we assume that each party will satisfy all of its respective obligations under the contract. For our Infrastructure backlog, we only include contracted revenues expected to be paid during the next three years following the backlog calculation date. Infrastructure backlog in this annual report does not include our Norvial toll road concession or our Energy line of business.

81

Our Infrastructure segment backlog does not include intersegment eliminations. We calculate our Infrastructure backlog as follows:

• for the Lima Metro, our Infrastructure backlog assumes that for 2020, 2021 and 2022, we will operate 44 trains at full operation, which in the aggregate will travel 4.8 million kilometers per year;

• for our Survial and Canchaque concessions, we assume our contractually agreed upon annual fee, adjusted for inflation. For our 2017, 2018 and 2019 backlog, we utilize the same adjustment amount that was utilized for our 2016 fee, which has already been negotiated; and

• for La Chira, for our 2017, 2018 and 2019, backlog is calculated to include the fees we will receive under the concession for our operation and maintenance, adjusted for inflation.

Our Infrastructure backlog as of December 31, 2019 was US$553.9 million. We expect to recognize as revenues 35.1% of our backlog by December 31, 2020 and 64.9% of our backlog thereafter. The following chart sets forth the growth of our Infrastructure backlog from December 31, 2015 to December 31, 2019.

Infrastructure Backlog (in US$ million)

The following pie chart sets forth our Infrastructure backlog breakdown by line of business as of December 31, 2019.

Backlog by Line of Business

82

The table below sets forth our ending Infrastructure backlog for 2017, 2018 and 2019, accounting for opening backlog for each year, annual contract bookings, cancellations during the year and adjustments and annual revenues recognized.

	2017			2018			2019
	(in millions of S/)
Opening backlog (end of prior year)		519.0			544.8			520.8
Contract bookings and adjustments during the year		288.6			209.6			231.7
Cancellations during the year		—			—			—
Revenues recognized during the year		(262.8	)		(233.6	)		(198.6	)
Ending backlog (end of current year)		544.8			520.8			553.9

Real Estate Backlog

Our Real Estate segment backlog reflects sales contracts with buyers for units that have not yet been delivered and will be recognized as revenues once they are delivered.

Our Real Estate segment backlog as of December 31, 2019 was US$63.3 million. We expect to recognize as revenues 100% of our backlog by December 31, 2020, and none thereafter. However, the ongoing COVID-19 pandemic and government measures to contain the spread of the virus, which have significantly increased economic uncertainty, may continue to impact our ability to perform our Real Estate backlog in the short term. As conditions are recent, uncertain and changing rapidly, it is difficult to predict the full extent of the impact of the pandemic on our backlog in the short term.

The following chart sets forth our Real Estate backlog breakdown by type of real estate activities as of December 31, 2019.

	2017			2018			2019
	(in millions of US$)
Opening backlog (end of prior year)		95.9			25.9			57.9
Contract bookings and adjustments during the year		129.6			125.7			85.1
Cancellations during the year		—			—			—
Revenues recognized during the year		(199.5	)		(93.7	)		(79.7	)
Ending backlog (end of current year)		25.9			57.9			63.3

Warranties

For certain of our contracts, we are required to provide performance bonds to ensure compliance with contractual obligations such as construction works, operation and maintenance of infrastructure assets, among others. The amount of the performance bond varies on a case-by-case basis, depending on the value of the project. Performance bonds are usually renewed annually until the contractual obligation which they intend to guarantee is fully satisfied.

83

As part of our real estate sales contracts, we provide a six-months warranty for latent defects, which covers hidden flaws not discoverable through inspection. The warranty extends to a five-year term if the defects are caused by: (i) the use of materials below the requisite quality standards; (ii) poor execution; or (iii) faulty land. We also provide a five-year warranty for structural defects, and assume the terms and conditions of our finishes suppliers’ warranties.

Quality Assurance

In 2019, our operations were certified according to the following international standards:

		ISO 9001 (QUALITY)	ISO 14001 (ENVIRONMENTAL)	OHSAS 18001 (SECURITY AND SAFETY)	OTHER
Engineering and Construction	GMI	x	x	x
	GyM	x	x	x
	Morelco	x	x	x	x
	VyV - DSD	x	x	x
Infrastructure	GMP	x	x	x
	GyM Ferrovías	x
	Concar	x	x	x
	Viva GyM			x

Engineering and Construction:

• GMI: ISO 14001, ISO 9001 and OHSAS 18001.

• GyM: ISO 9001 in project management control processes; ISO 14001 and OHSAS 18001 in engineering, procurement and construction of electromechanical projects, civil works and buildings.

• Morelco: ISO 14001, ISO 9001 and OHSAS 18001; in addition, ASME ESTAMPES U/S NATIONAL BOARD ESTAMPER.

• Vial y Vives—DSD: ISO 14001, ISO 9001 and OHSAS 18001.

Infrastructure:

• GMP: ISO 14001, ISO 9001 and OHSAS 18001: certified for oil and gas production processes in lots III, IV, I and V; gas processing at the Pariñas plant; reception, storage and dispatch of hydrocarbons-derived products in nine terminals (Pisco, Mollendo, Ilo, Cusco, Juliaca, Etén, Salaverry, Chimbote and Supe).

• GyM Ferrovías: ISO 9001 for the operation and conservation of railway infrastructure and rolling stock of the Transport System - Line 1.

• Concar: ISO 9001, ISO 14001 and OHSAS 18001.

• Viva GyM: OHSAS 18001 for its main office and the Los Parques de Comas project.

84

Corporate Social Responsibility

We are committed to the sustainable development of our operations. We seek to create long-term value and conduct business in a manner that is not only economically viable, but also beneficial to greater society and environmentally responsible.

Our Sustainability Policy was approved by our board of directors on January 28, 2016, and its guidelines allow us to focus on seven managerial priorities linked to our stakeholders: ethical conduct, development of people, operational excellence, health and safety, the environment, communication and dialogue and sharing wellbeing.

The focuses of our social investment projects include education and capacity building to foster job creation and the promotion of responsible citizen behavior, particularly among our users, suppliers and neighboring communities.

The following are key programs we perform for the benefit of society:

• Metro Culture: We conduct workshops that transform trains and train stations into centers of social and cultural education to promote respect and tolerance. In 2019, we carried out 51 artistic presentations and incorporated approximately 32,000 people in health campaigns.

• Road Safety Education: This program promotes our culture of safety and accident prevention by training communities surrounding roads and highways that we operate or maintain. In 2019, we provided 146 training courses, involving approximately 5,850 employees and 5,450 members of the public.

• Ayni: This social support program aims to improve the quality of life in urban areas by promoting respectful coexistence among new owners of our real estate projects. The initiative trains neighbors on several legal and managerial matters and on conflict management and leadership. In 2019, the program trained approximately 700 people.

• Development of local suppliers: We build the capacities of our local suppliers and help them to develop their businesses by improving the quality of the goods and services they provide and encouraging the adoption of formal and responsible managerial styles. In this way, we make local economies more dynamic.

• Labor Capabilities: This is a recruitment program where we share construction knowledge and train community members on building techniques, risk prevention and leadership skills. In this way, we increase the employability of members of local communities, generate formal jobs, reduce project risks, develop more efficient recruiting processes, and strengthen the trust with local communities. In 2019, we trained approximately 650 participants, 70% of whom joined the group.

• Cantera Program: This program is designed to attract and train young talents in engineering. In 2019, we recruited 50 young people out of a total of approximately 8,800 participants.

Regulatory Matters

Set forth below is a description of the regulatory framework applicable to our company. We believe we are in compliance, in all material respects, with applicable laws and regulations in all of our business segments.

Engineering and Construction

Regulatory Framework Applicable to Contracts with the Public Sector

As of the date of this annual report, Peru’s Public Procurement Law, approved by Supreme Decree No.° 082-2019-EF (Texto Único Ordenado de Ley de Contrataciones del Estado) and its Regulations which, in turn, was approved by Supreme Decree No. 344-2018-EF, which entered into force on January 30, 2019, governs services and construction agreements entered into with public entities. Article 29 of Supreme Decree No. 344-2018-EF establishes that, at the beginning of the procurement process, the contracting public entity must prepare a technical file describing the characteristics of the services it intends to purchase and the selection process for its counterparts, among other specifications.

85

The selection processes are established in Article 53 of Supreme Decree No. 344-2018-EF as follows:

• public biddings (licitación pública), applicable to goods and works;

• public tenders (concurso público), applicable to services, including consulting services;

• simplified award (adjudicación simplificada), applicable for the acquisition of any of the following: to (i) goods, if their value exceeds S/33,600 and under S/400,000; (ii) services, if their value exceeds S/336,200 and under S/400,000; and (iii) works, if their value exceeds S/33,600 and under S/1,800,000;

• electronic reverse auction (subasta electrónica inversa), applicable to goods and services with values exceeding S/33,600;

• selection of individual consultants (selección de consultores individuales), applicable for the hiring of qualified consultants who do not need teams of personnel or additional professional support;

• price comparison (comparación de precios), applicable to goods and services that are easy to obtain in the market and that are not manufactured, produced, supplied or provided under a particular description or set of instructions given by the contracting entity; and

• direct contracting (contratación directa), applicable to goods and services, in emergency situations arising from catastrophic events, involvement of national security, shortages, among other similar reasons.

In addition, Supreme Decree No. 344-2018-EF establishes that the selection processes include the following phases:

• in the case of public biddings, public tenders and simplified award: notice; registration of participants; submission and reply of inquiries; submission and reply of comments; preparation of the terms and conditions of the selection process; submission of bids; evaluation and qualification of bids; and award (articles 70, 79 and 88);

• in the case of the selection of individual consultants: notice; registration of participants; submission of bids; evaluation and qualification of bids (article 92); and

• in the case of price comparison: notice, submission of bids, and adjudication (articles 98 and 99).

Article 46 of Peru’s Public Procurement Law establishes that any participants in a public procurement processes must be registered in the Peruvian National Suppliers Registry and must not be banned from contracting with the state. Article 9 of Supreme Decree No. 344-2018-EF establishes that this registration has an indefinite validity and that all contractors must keep information updated.

Bidders may participate in the selection process as part of a joint operation, in which case all members of the joint operation must be registered in the Peruvian National Registry of Suppliers and will be jointly liable for all consequences arising from the joint operation’s participation in the selection process and the execution of the agreement. Certain exceptions to the abovementioned joint liability for joint operations may apply, in cases where a contractor proves that only one party is liable to be sanctioned due to the nature of the infraction, the joint operation formal undertaking or the joint operation agreement.

86

GyM and GMI are registered in the Peruvian National Suppliers Registry as a construction and a consulting company, respectively.

Article 35 of Supreme Decree No. 344-2018-EF establishes the types of contracts that may be entered into by public entities:

• lump-sum (sistema a suma alzada), applicable when the amounts, scales and technical specifications are determined in the terms and conditions of the selection process. The bidder submits its proposal indicating a fixed amount and a term for the completion of the agreement;

• unit price, rates or percentages (sistema de precio unitario, tarifa o porcentajes), applicable when the nature of the service to be provided does not allow an accurate determination of the required quantities or dedication time;

• lump-sum and unit price, rates or percentages mix (esquema mixto de suma alzada y precios unitarios), applicable when the included items have known quantities or quantities which can be known with accuracy and precision, they can be contracted under the lump sum scheme, however when items where the quantities cannot be known have to be contracted under the unit price system; and

• fixed amount plus success fee (honorario fijo y comisión de éxito), applicable in contracts for rendering services. The fixed amount and success fee may be estimated on the basis of percentages.

Article 36 of Supreme Decree No. 344-2018-EF establishes that, in the case of goods and works, the terms and conditions of the selection process must indicate the execution type of the agreement as follows:

• “turn-key” (llave en mano), when completion is subject to the construction, equipment assembly and, if applicable, the assisted operation of works. In case of goods procurement, the installation and commissioning of such goods are also included; and

• bid contest (concurso oferta), when completion is subject to the submission of the technical file and the completion of the works.

Peru’s Supervisory Authority on Public Procurement (Organismo Supervisor de las Contrataciones del Estado, or OSCE, by its Spanish acronym) is a public-sector entity within the Peruvian Ministry of Economy and Finance, that oversees the selection processes carried out by public entities; manages the Peruvian National Registry; imposes penalties to suppliers that violate the provisions set forth in Peru’s Public Procurement Law, its Regulations and other related provisions; and informs the government’s General Comptroller Office (Contraloría General de la República) regarding violations to the regulations when damages are caused against the State.

Pursuant to the recent amendments to the Public Procurement Law, companies sentenced for corruption charges, among other criminal offences, or companies whose representatives have admitted committing corruption acts, will be prohibited from participating in public procurement processes.

Regulatory Framework Applicable to Contracts with the Private Sector

Parties to a private-sector agreement may freely determine the contract type and its contents as long as it complies with certain legal requirements, including the provisions set forth in Article 1353 of the Peruvian Civil Code (which states that all contracts, including innominate contracts, must comply with the rules of Section VII of the Peruvian Civil Code, absent a statute specific to said contract type that collides with said rules). GyM and GMI participate in private-sector contracts for engineering and constructions.

87

Construction Activities in Peru

Legal Framework

Peru’s Law for the Promotion of Private Investment in Construction, approved by Legislative Decree No. 727 (Ley de Promoción de la Inversión Privada en Construcción), states that construction activities in Peru are in the public interest and a national priority. According to Section F of the Fourth review of the United Nations International Statistical Industrial Classification (ISIC), construction activities typically consist of the construction of dwellings, buildings and stores; and the construction of large scale infrastructure projects such as highways, bridges, tunnels, railways, irrigation systems, sewage systems, industrial facilities, pipelines and electric lines, among others. GyM has developed numerous projects in the construction sector. Currently, our company focuses on buildings (ISIC Division 41), civil works (ISIC Division 42) and specialized activities (ISIC Division 43).

Construction entities must comply with the National Building Regulations, approved by Supreme Decree No. 011-2006-VIVIENDA (Reglamento Nacional de Edificaciones), which establishes that urban allotments and buildings must be developed in compliance with the rules governing safety, functionality, accessibility, habitability and environmental impact. According to Technical Regulation No. G.030 (Rights and Responsibilities) of the National Building Regulations, construction companies, such as GyM and GMI, are responsible for (i) executing works in accordance with project specifications and applicable regulations; (ii) possessing sufficient organization and infrastructure to guarantee the feasibility of the project; (iii) appointing the party responsible for the construction to assume its technical representation; (iv) providing the resources and materials to complete the project pursuant to the terms of the agreement and required standards and within the approved budget; (v) executing subcontracts within contractual limitations; and (vi) delivering to the client documented information regarding the executed works.

Notwithstanding any legal actions that the construction company may take against suppliers, manufacturers or subcontractors, the construction company may be responsible for all the works, including those executed by subcontractors, and for the use of defective materials or supplies.

Penalties for violating the National Building Regulation are determined by the municipal government in the jurisdiction where the project is developed and set forth in its corresponding regulations. In addition, they may also pursue criminal actions or civil claims if applicable.

Safety Regulation in Construction Projects

The Law on Safety and Health at Work (Law No. 29783) is intended to promote workplace accident prevention and applies to all business sectors. The principal safety rules applicable to construction projects include the following:

• companies with 20 or more employees must establish a committee for the promotion of workplace safety and health that oversees the implementation of the required internal safety and health regulation policy;

• all projects must have a safety and health plan consisting of all the technical and administrative mechanisms to guarantee the physical integrity and health of workers and third parties during project execution;

• companies shall hire an occupational physician and establish an area of occupational medicine;

• companies shall perform periodic audits to verify whether internal safety and health regulations are in accordance with law;

• occupational diseases and work accidents detected during project execution must be recorded and the competent authority must be notified in accordance with the Regulations of the Law on Safety and Health at Work, approved by Supreme Decree No. 005-2012-TR, and with Occupational Health Manual, approved by Ministerial Resolution No. 510-2005-MINSA;

88

• companies must provide for medical examinations of its employees prior to, during and at the termination of their employment (subject to certain terms and conditions depending on whether the employees were engaged in high-risk activities);

• companies must show a safety and health plan; an index of frequency; and our company’s performance in safety and health in order to be awarded public and private projects;

• use of individual protective equipment, including gloves, safety goggles, boots and helmets, is mandatory when risks to safety and health cannot be prevented by other means; and

• personnel responsible for safety must comply with all requirements in Rule NTP 399.010.1 for fire prevention.

The Peruvian Ministry of Labor and Employment Promotion, the National Superintendence of Labor Inspection (the “SUNAFIL”) and the Peruvian Ministry of Health are the competent organisms in the safety and health fields, respectively.

Safety Regulations Applicable to Subsectors

In addition to the Law on Safety and Health at Work applicable to all our business sectors, our E&C segment must also comply with the regulations set forth below.

Power and Utilities

GyM must comply with the Rules of Safety and Health at Work with Electricity, approved by Ministerial Resolution No. 111-2013-MEM-DM, for its activities relating to the construction of hydroelectric plants, transmission lines and substations. OSINERGMIN is the authority responsible for supervising and enforcing compliance of the foregoing rules. The most relevant of the safety rules with which GyM must comply include: (i) providing employees with necessary information regarding safety measures related to the tasks they perform; (ii) providing employees with adequate safety equipment; and (iii) evaluating and remedying potential sources of danger.

Mining

GyM must comply with the Mining Occupational Health and Safety Regulation, approved by Supreme Decree No. 024-2016-EM, and other related regulations for their mining-related construction activities including the construction of mineral processing plants and other mining-related buildings, among others. In developing mining projects, our subsidiaries’ personnel must follow the safety programs and be familiar with internal rules from their mining sector client. The SUNAFIL and OSINERGMIN are the authorities responsible for supervising and enforcing compliance of the foregoing rules. The most relevant of the safety rules with which GyM must comply include: (i) creating an internal safety and health regulation policy and selecting a manager responsible for its implementation; (ii) monitoring and recording workplace accidents and occupational diseases; (iii) providing information to employees regarding the safety risks related to their work; (iv) providing employees necessary first aid and medical attention in the event of a workplace accident; (v) providing employees the necessary tools, equipment or materials to perform their activities safely; and (vi) evaluating risks in order to establish accident prevention and mitigation plans.

Oil and Gas

GMP must comply with the Hydrocarbons Safety Regulations, as approved by Supreme Decree No. 043-2007-EM, which are enforced by OSINERGMIN, while performing any hydrocarbon activities. The most relevant safety rules with which GMP must comply include: (i) assuring that senior project managers are responsible for the safety and health of workers; (ii) assigning specialized personnel responsible for safety and health matters; and (iii) monitoring and recording workplace accidents on a monthly basis.

89

Industrial Construction

GyM must comply with the Industrial Safety Regulation, approved by Supreme Decree No. 42-F (Reglamento de Seguridad Industrial), for its activities relating to the construction of industrial plants. The most relevant of the safety rules with which GyM must comply include: (i) overseeing that worksites are constructed, equipped and managed to provide security and protection to employees; (ii) instructing employees about risks to which they are exposed related to their work and adopting necessary measures to avoid accidents and damage to employee health; and (iii) overseeing inspections to verify the proper installation of safety equipment.

Registries and Permits

Pursuant to Supreme Decree No. 005-2020-TR civil contractors must be registered in the National Registry of Civil Construction Works – (the “RENOCC”), governed by the Administrative Labor Authority. Civil construction work companies register with the RENOCC, which assigns them with a unique registration number with which the company is identified until completion of the relevant project, regardless of the number of contractors and subcontractors that participate in the execution of the work. GyM has registered in the National Civil Construction Contractors and Subcontractor Registry in compliance with the Supreme Decree No. 008-2013-TR.

According to Supreme Decree No. 005-2008-EM mining contractors must register with the National Mining Contractors and Specialized Companies Registry. GyM is currently registered. Proper registration requires the filing of a request with the Regional Agency of Energy and Mines with jurisdiction in the area where the mining activities will take place. In addition, within five days upon commencement of construction, GyM must provide in writing its employees with the following information: (i) the company’s legal name; (ii) the scope of the contract; (iii) the place of execution; (iv) the applicable health and safety regulations; (v) the Safe Work Written Procedures (PETS); and, (vi) risk insurance policies.

Labor Law Requirements in Civil Construction

Labor law requirements in civil construction consist of the specific legal framework for civil construction workers and the general legal framework applicable to the administrative personnel in the civil construction sector set forth in the Single Revised Text of the Labor Productivity and Competitiveness Law, approved by Supreme Decree No. 003-97-TR.

Seasonality of services is one of the main features in the specific legal framework due to the temporary nature of construction contracts. Consequently, certain general rules such as the trial period are not applicable to construction workers.

The principal terms and conditions relating to collective bargaining from our civil construction workers have been agreed upon and recorded in the 2018-2019 agreement, dated September 11, 2018, and entered into between the Peruvian Chamber of Construction and the Federation of Civil Construction Workers (Federación de Trabajadores en Construcción Civil). By means of the 2018-2019 agreement, the parties have, among other things, agreed on an increase in the daily wage of such employees.

Supreme Decree No. 009-97-SA, Law No. 26,790 and Supreme Decree No. 003-98-SA require construction companies to have complementary high-risk insurance for workers that perform high risk tasks. As of the date of this annual report, GyM has this insurance coverage.

The insurance coverage provides medical care for injured workers to allow them to achieve full recovery. Moreover, it provides pensions to workers or their beneficiaries in case the worker becomes handicapped or dies as a result of a work accident or occupational disease.

90

Environmental Regulations

Section 24 of the General Environmental Law, approved by Law No. 28,611 (the “General Environmental Law”), provides that all human activity that involves construction services, among others, likely to cause significant environmental impact is subject of regulation by the National System of Environmental Impact Assessment. The Peruvian Ministry of the Environment, through the Environmental Supervising and Enforcement Agency (Organismo de Evaluación y Supervisión Ambiental, or “OEFA”) supervises compliance with the law and enforces environmental rules related to mining, oil and gas and electricity.

In addition to being responsible for the impact that its activities, by action or omission, may have on the environment, GyM is also subject to an environmental impact assessment and must obtain an environmental certification necessary to obtain project permits or licenses. GyM must also adopt measures for the management of hazardous materials intrinsic to its activities to mitigate the negative environmental impact its activities may have.

Civil Construction

Supreme Decree No. 015-2012-VIVIENDA (modified by the Supreme Decree No. 019-2014-VIVIENDA and Supreme Decree No. 0082016-VIVIENDA) regulates the environmental aspects of projects related to housing, urbanism, construction and sanitation activities in urban or rural areas. The National Directorate of Housing, Urbanism, Construction and Sanitation supervises the compliance and enforces the applicable rules. Projects are categorized according to their environmental impact during and after their execution and different rules are established for each category including compliance with the following environmental studies prior to starting construction works: (i) projects expected to cause minor environmental impacts require an environmental impact statement; (ii) projects expected to cause moderate environmental impacts require a semi-detailed environmental impact assessment; and (iii) projects expected to cause a major environmental impact require a detailed environmental impact assessment.

Other Subsectors

Depending on the subsector in which it operates, GyM is required to follow specific environmental provisions issued by the competent authorities. For example, with respect to hydrocarbon activities, the Ministry of Energy and Mines has enacted the Oil and Gas Environmental Regulations, by means of Supreme Decree No. 039-2014-EM modified by Supreme Decree No. 023-2018-EM

Tax Legal Regime Applicable to Construction

Section 63 of the Peruvian Income Tax Law, approved by Supreme Decree No. 179-2004-EF, establishes that construction companies engaged in construction contracts for a period longer than one fiscal year can choose to be taxed under any of the following systems:

• allocate to each fiscal year the gross income resulting from applying the percentage of gross margin estimated for the full construction over the amounts collected for the same construction; or

• allocate to each fiscal year the gross income calculated by deducting the costs corresponding to the tasks performed on each construction during that year from the amount collected or that is expected to be collected for such tasks.

In both situations, a special accounting registry must be kept for each project, which is meant to keep a record of the costs, expenses and income of each project in an account separate from the general analytical accounts (cuentas analíticas de gestión).

Until December 31, 2012, construction companies could defer revenues related to each individual project until the total completion of the project, provided the project was completed in three years or less. In such cases, the income was to be recognized in the fiscal year in which the project concluded or was delivered. In case the project was scheduled to conclude in a period exceeding three years, the results would be determined in the third year in accordance with the progress of the works over the three-year period. Beginning in the fourth year, results were determined following the foregoing methods.

Starting on January 1, 2013, in accordance with Legislative Decree No. 1112, which amended the Peruvian Income Tax Law, construction companies that adopted the deferral method are authorized to continue with the use of such method only with respect to income arising from the execution of work contracts initiated prior to January 1, 2013, until their completion, and for execution of work contracts initiated on or after January 1, 2013 the deferral method is no longer accepted.

91

The Peruvian Income Tax Law also provides that the difference that may result from a comparison between the real gross income and the income assessed pursuant to any of the methods described above shall be allocated to the fiscal year in which the work concluded. Additionally, the company must apply the same system to all its construction contracts and must receive prior authorization from tax authorities to change the applied system.

Prevention of Money Laundering and Financing of Terrorism

Regulations for money laundering and terrorism financing prevention, approved by SBS Resolution No. 789-2018 (which has replaced SBS Resolution No. 486-2008 as of March 15, 2018), require construction and real estate companies to implement a money laundering and terrorism financing prevention system, including, among others, the appointment of a compliance officer, setting up a registry of operations and notifying the Financial Intelligence Unit of the SBS, the entity responsible for supervising and enforcing compliance, of any suspicious activity.

Infrastructure

Infrastructure and Public Services through Public Private Partnership Contracts

In recent years, the Peruvian state has implemented a new regulatory framework (Legislative Decree No. 1362 and its regulations, approved by Supreme Decree No. 240-2018) to set forth the procedures and mechanisms for enhancing private investment for the development of public infrastructure, public services, any ancillary services, applied research projects and/or technological innovation, through Public-Private Partnerships (PPP) and Projects with State Assets.

The main aspects of the new legal framework are the following:

1. The Ministry of Economy and Finance (Ministerio de Economía y Finanzas) is the governing authority of the National System for the Promotion of Private Investment (SNPIP), composed by ministries and public agencies of the national government, the Agency for the Promotion of Private Investment—ProInversión, and regional and local governments.

2. Private investment projects will comprise the following stages: (i) planning and programming, (ii) formulation, (iii) structuring, (iv) transaction, and (v) contract execution. Great emphasis is given to the Evaluation Report (Informe de Evaluación), a document determining the economic, financial and legal viability of a potential Public Private Partnership applying, where appropriate, the national public investment system. Investors are entitled to receive from the Peruvian state: (a) in the case of self-financed projects, taxes and tolls to be collected from final consumers; (b) in the case of co-financed projects, subsidies and payments from the public entity awarding the project; and (c) any other financing structure agreed between the parties.

3. The management of Public Private Partnership contracts by the three levels of government (central, regional and local) is regulated.

4. For projects in regulated sectors, the monitoring of Public Private Partnership contracts is subject to the provisions of the Law No. 27,332, Framework Law for Regulators on Private Investment for Public Services. According to this law, OSIPTEL, OSITRAN, SUNASS and OSINERGMIN should primarily safeguard the compliance of service levels agreed in Public Private Partnership contracts. For this purpose, Public Private Partnership contracts must establish the necessary arrangements to ensure timely and efficient supervision during the contract execution stage. To this end, public entities are required to ensure timely participation of regulatory agencies in the arbitration, when decisions and matters related to the competence of those bodies are discussed.

92

5. Favorable opinions for the Public Private Partnership Agreements from the General Comptroller Office of Peru are required. The General Comptroller will issue a report on any aspects that may jeopardize the financial capacity of the Peruvian state, according to Law No. 27,785, Organic Law of the National Control System and the General Comptroller of Peru.

6. Investors interested in participating as bidders in private investment processes must review the list of restrictions and prohibitions established in the Public Procurement Law. Whether an investor is barred from participating shall be determined through administrative channels, and such restriction will apply to any expected strategic partners as well. Furthermore, it is stated that the restriction would extend to strategic partners and to companies who have exercised direct control over the investor, as indicated in the regulations approved by the Superintendence of the Stock Market.

7. The development of projects related to assets owned by the Peruvian state (Legislative Decree No. 674, Law Promoting Private Investment in State Enterprises) can be carried out by private sector initiatives, without committing any public resources or transferring any risks to public entities, unless expressly required by law.

Each of our subsidiaries Norvial, Survial, Canchaque and GyM Ferrovías has entered into a concession agreement with ProInversión and the Peruvian Ministry of Transportation and Communications. La Chira has entered into concession agreements with ProInversión and Sedapal S.A. The abovementioned agreements were entered into in accordance with the provisions in force at the time of their execution.

Infrastructure Construction and Safety

Infrastructure concessionaires must assure that the construction companies they hire to construct infrastructure projects comply with the foregoing rules relating to construction projects. In addition, companies engaged in road construction must comply with the guidelines issued by the Road and Railways General Directorate of the Peruvian Ministry of Transportation and Communications and with the National Road Infrastructure Management Regulation regarding road construction, maintenance and safety. These regulations establish procedures for authorizing road construction and approving work contracts, among others.

Environmental Regulations

Peruvian environmental laws and regulations have become increasingly stringent over the last decade. All industries and projects are subject to Peruvian laws and regulations concerning water, air and noise pollution, and the discharge of hazardous substances. The main legislation governing environmental matters is Law No. 28,611, General Environmental Law; Law No. 27,446, the Law of the National System of the Environmental Impact Evaluation (the “SEIA”); the regulations of the SEIA Law, approved by Supreme Decree No. 019-2009-MINAM; and several environmental regulations that have been issued under the General Environmental Law, SEIA and other laws by the government with the collaboration of the Peruvian Ministry of the Environment.

Since the enactment of the General Environmental Law in October 15, 2005, several technical environmental regulations have been issued and this environmental regulatory framework is generally revised and updated regularly. Some regulations apply generally to Peruvian industries and some technical regulations are issued for specific industries.

The main environmental rules applicable to infrastructure projects include those described above in “—Engineering and Construction—Environmental Regulation.”

Peruvian Hydrocarbon Regulation

Our hydrocarbon operations are subject to governmental regulations as described below.

93

Exploration and Production

GMP is engaged in two major activities relating to the exploration and production of oil and gas: exploration and production of oil fields; and providing services to the oil industry.

Exploration and Production of Oil Fields

Peru’s hydrocarbon legislation regarding oil and gas exploration and production activities includes, among others, the Hydrocarbon Organic Law approved by Supreme Decree No. 42-2005-EM and the regulations governing the qualification of petroleum companies; the exploration and production of hydrocarbons; the transportation of hydrocarbons; hydrocarbons pipelines and safety requirements in such activities.

The foregoing regulations define the roles of Peruvian government agencies that regulate the oil and gas industry; provide the framework for the promotion and development of hydrocarbon activities based on the principles of private-sector competition and access to all economic activities; and set the safety and security standards as well as the legal proceedings for carrying out operations.

The Peruvian Constitution establishes that the government is the sole proprietor of underground hydrocarbons within its national territory. However, the Peruvian government has granted Perupetro, a state-owned company authorized to negotiate and enter into agreements for the exploration and/or production of hydrocarbons, the ownership right over the hydrocarbons extracted which allows Perupetro to enter into such agreements. Furthermore, the Peruvian Ministry of Energy and Mines, the Environmental Evaluation and Supervision Agency (“OEFA”) and OSINERGMIN constitute public entities that play an active role in oil and gas regulation.

The Peruvian Ministry of Energy and Mines is responsible for devising energy and mining policies; supervising activities in the energy and mining sectors; and promoting investments in those sectors. Within the Peruvian Ministry of Energy and Mines, the General Directorate of Hydrocarbons (“DGH”) is responsible for regulating the development of oil and gas fields and the General Directorate of Energy-Related Environmental Affairs (“DGAAE”) is responsible for reviewing and approving regulations related to environmental risks associated with hydrocarbon exploration and production activities.

OEFA is a public entity ascribed to the Peruvian Ministry of the Environment and is responsible for evaluating and ensuring compliance with applicable environmental rules covering hydrocarbon activities, as well as for initiating sanctioning proceedings when a breach of an environmental regulation occurs. OSINERGMIN is a public entity ascribed to the Presidency of the Council of Ministers’ (Presidencia del Consejo de Ministros) office and is responsible for ensuring compliance with safety and security standards in the hydrocarbon industry, as well as for sanctioning proceedings. GMP is subject to the supervision, authority and regulations enacted by the foregoing agencies.

Regarding hydrocarbon exploration and production activities, companies are required to enter into either a licensing or a services agreement with Perupetro; other contractual arrangements are permitted with prior approval from the Peruvian Ministry of Energy and Mines. The foregoing agreements are governed by private law and must be approved by the Peruvian Ministry of Energy and Mines and the Peruvian Ministry of Economy and Finance. In licensing agreements, licensees obtain authorizations to explore and produce hydrocarbons in a determined area, are granted ownership over the extracted hydrocarbons and are subject to the payment of royalties. Licensees may trade the hydrocarbons with no limitations on sales prices, except in the event of a national emergency.

Services agreements grant contractors the right to perform hydrocarbon exploration and production activities in a determined area and receive compensation according to the production of hydrocarbons. The contractor is technically and financially responsible for the operations, but Perupetro maintains the ownership over the hydrocarbons extracted. GMP is party to services agreements with respect to Blocks I and V, and to licensing agreements with respect to Blocks III and IV. Each block has an independent contract with Perupetro.

94

Services and licensing agreements are intended for the development, production and eventually transportation of hydrocarbons, as well as for certain storage activities. Services and licensing agreements commonly include a minimum performance schedule guaranteed by performance bonds and require corporate guarantees to be issued to secure the contractor’s compliance to the provisions established by the parties.

Additionally, a company must be qualified by Perupetro prior to entering into hydrocarbon exploration and production agreements. In order to qualify, a company must meet the standards under the Regulations on the Qualification of Petroleum Companies (approved by means of Supreme Decree No. 030-2004-EM), requiring companies to demonstrate that they have the technical, legal and financial capacity to comply with all the obligations they will assume under the agreement with Perupetro. Such capacities are measured according to the characteristics of the area to be explored or produced, the expected investment required for the project, and the strict fulfillment of the rules regarding prior consultation (if applicable), citizen participation and environmental issues related to the operation’s performance. Upon a positive evaluation, the company is issued a qualification certificate from Perupetro that allows it to initiate the negotiations of the agreement. Notwithstanding the foregoing, the company remains responsible for obtaining all other licenses, permits and approvals required by applicable regulation.

Under the current regulation, 30 years is the maximum term of services and licensing agreements for the production of crude oil. On the other hand, natural gas and condensates-related services or licensing agreements have a maximum term of 40 years. Graña y Montero acts as GMP’s guarantor in all of the Block I, Block III, Block V and Block VI contracts.

GMP must comply with Supreme Decree No. 043-2007-EM for its activities relating to hydrocarbons in all phases. The OSINERGMIN is the authority responsible for the supervision and enforcement of the foregoing rules.

Services to the Petroleum Industry

Peruvian regulation provides that all companies that enter into a service agreement with any company that holds a licensing or services agreement must be registered as a subcontractor in the Hydrocarbons Public Registry in case they render any of the following services: (i) geological studies, geophysical studies, petroleum engineering related to drilling operations, production and well services; or (ii) construction of oil pipelines, gas pipelines, refineries and their maintenance, and specialized transportation by land, air, sea or river. In order to register a company as a subcontractor in the Hydrocarbons Public Registry, prior authorization from the General Directorate of Hydrocarbons (“DGH”) of the Peruvian Ministry of Energy and Mines is required.

On June 1, 2004, GMP was included as a subcontractor for the petroleum industry in the Hydrocarbons Registry of Lima’s Public Registry of Legal Entities; such registry remains in force as of the date of this annual report.

Environmental Regulations

The Peruvian Ministry of Energy and Mines is responsible for enacting environmental regulation for the oil and gas sector. The Oil and Gas Environmental Protection Regulation, approved by Supreme Decree No. 039-2014-EM and modified by Supreme Decree No. 023-2018-EM, sets out the legal framework and specific rules applicable to the exploration, production, refinement, processing, transportation, commercialization, storage and distribution of hydrocarbons, with the aim of preventing, controlling and remedying the negative environmental impacts arising from the foregoing activities.

The Peruvian Ministry of the Environment establishes general rules applicable to different activities in several sectors, in contrast to the specific rules enacted by the Peruvian Ministry of Energy and Mines regarding the oil and gas sector. Environmental laws and regulations are enforced by the National Environmental Enforcement Agency, OEFA (Organismo de Evaluación y Fiscalización Ambiental) which was created in 2008. Sanctions range from warnings and fines to suspensions of activities and mitigation of environmental damages, among others. In this regard, a breach of the obligations contemplated in the Environmental Impact Assessments in the hydrocarbons sector may originate fines up to 30,000 Tax Units (approximately US$39 million or S/126 million) according to the applicable law.

95

The main environmental rules applicable to GMP’s hydrocarbon projects include:

• obtaining an environmental certification and adopting the necessary measures to prevent and/or mitigate environmental impacts resulting from their activities;

• meeting minimum size, environmental and safety requirements applicable to worksites; handling and storing of hydrocarbons pursuant to safety and environmental requirements; establishing programs to monitor environmental issues; and

• providing training on environmental matters related to employee and personnel activities and responsibilities, especially with respect to regulations and procedures established for environmental protection and the environmental and legal consequences of non-compliance.

Operation of Terminals

In accordance with the Glossary, Acronyms and Abbreviations for the Hydrocarbons Subsector approved by Supreme Decree No. 032-2002-EM, a terminal is a facility that includes storage tanks, submarine lines or docks for receiving or dispatching liquid hydrocarbons and facilities related to activities of storage and reception and/or dispatch of liquid hydrocarbon from/to vessels.

Consorcio Terminales and Terminales del Perú are two joint operations conducted by GMP and Oiltanking Peru S.A.C. which operated ten of Petroperú’s terminals in Peru: (i) the South Terminals of Pisco, Mollendo, Ilo, Juliaca and Cuzco; and (ii) the North Terminals of Eten, Salaverry, Chimbote and Supe; including Callao, respectively. Consorcio Terminales and Terminales del Perú provide hydrocarbons handling and storage services in Peru for gasoline, aviation fuel and diesel, among others.

The operation of both the South and North Terminals was granted through the “South Terminal Operation Agreement” and the “North Terminal Operation Agreement” (the “Operation Agreements”) dated February 2, 1998, by and among Petroperú and Consorcio Terminales. The Operation Agreements resulted from two tenders in accordance with Legislative Decree No. 674, and mandate that Consorcio Terminales, as operator of the terminals, be responsible for the storage, handling, additivation and dispatch of hydrocarbons in such facilities.

The initial term of the Operation Agreements was 15 years; however, the parties agreed to extend the duration of the agreement to an additional 18 months ending in August 2014. The purpose of this extension was to undertake the additional investments that were necessary to satisfy the national demand increase and to perform operative and safety-related improvements to the facilities. In July of 2014, the operation agreements were extended for an additional four years ending in July of 2018.

The South Terminal operation agreement was extended, most recently until November 2, 2019. On November 3, 2019, the South Fuel Terminal concession reverted to Petroperú. With respect to the North Terminal operation agreement, the agreement with Consorcio Terminales expired on October 31, 2014, however, GMP and Oiltanking were granted a new operation agreement for the terminal, this time under the ‘Terminales del Perú’ Consortium, which provided for a 20-year extension that will end on November 1, 2034. Additionally, Terminales del Perú was granted with the operation agreement for the terminal del Centro-Callao, for 20 years commencing on September 2, 2014 until September 1, 2034. In executing their operations, both Consorcio Terminales and Terminales del Perú are committed to develop and follow a work program which must include an investment schedule. The work program performed included the installation of protection systems and loading systems, among others, and was secured by a performance bond.

GMP’s activities as a part of Consorcio Terminales fall under the scope of the Hydrocarbons Storage Safety Regulation, approved by Supreme Decree No. 052-93-EM. Consorcio Terminales is registered in the Hydrocarbon Registry of OSINERGMIN and is authorized to perform transportation activities such as loading and unloading hydrocarbons from vessels on the terminals. This regulation establishes the conditions under which GMP can operate and maintain storage facilities for hydrocarbons. For instance, the regulation specifies the technical requirements for storage systems, which vary depending upon the kinds of hydrocarbons stored. Moreover, pursuant to this regulation, GMP must establish procedures to minimize potential risks that these facilities present for employees, third parties and properties.

96

Gas Processing Plants

In accordance with the Glossary, Acronyms and Abbreviations for the Hydrocarbons Subsector, approved by Supreme Decree No. 032-2002-EM, a processing plant is a facility where the natural characteristics of hydrocarbons are changed to break them into the different compounds that comprise them, as well as the subsequent transformations to convert the hydrocarbons into fuel of specific qualities and suitable for transportation. This includes the facilities where the impurities, hydrogen sulfide, carbon dioxide, water and hazardous components are removed from natural gas.

Our processing and fractionation activities fall under the scope of regulations governing hydrocarbons refinement and processing including regulations on the design, construction, operation and maintenance of refineries and hydrocarbons processing plants, the oil refining process, the manufacture of natural asphalts, oil and lubricants, basic petrochemical activities and the processing of natural gas and condensates. In order to comply with these regulations, GMP must take cautionary measures in order to protect the safety of its employees and its facilities, protect the environment, preserve energy resources and ensure the quality of the products or services it delivers. For instance, GMP’s plant operations must be authorized by the General Direction of Hydrocarbons and comply with fire safety regulations. In the event of an accident, GMP must notify the Peruvian Ministry of Energy and Mines, the Peruvian Ministry of Labor and the Peruvian Social Security Administration.

Terms of our Concessions

Our concessions are subject to certain terms and conditions established in each concession agreement. During the term of the concessions, we are responsible for the construction and maintenance of the infrastructure necessary to their operation. The concession agreements establish minimum capital stock requirements for our concessionaire subsidiaries as follows: US$15 million (S/50 million), US$8 million (S/27 million), US$0.8 million (S/2.7 million), S/46 million and S/100 million for Norvial, Survial, Canchaque, La Chira and the Lima Metro, respectively.

The concession agreements establish grounds for termination including mutual agreement of the parties thereto, force majeure and breach of certain contractual obligations. Additionally, in the case of La Chira and the Lima Metro, the agreement can be terminated unilaterally by the grantor, with the payment of compensation. On the expiration date, all of the assets that are essential for the operation of the concession are considered the state’s property and no compensation is paid to the concessionaire.

In the event that changes in legislation or regulations that are exclusively related to the financial conditions of the earnings and/or costs associated with the investment, operation or conservation of the infrastructure, affect the economic terms of the contract by 10% or more, the concession agreements set forth economic terms adjustment mechanisms aimed at restoring the economic and financial equilibrium. See “—Infrastructure—Principal Infrastructure Lines of Business.”

Real Estate

Since 1987, we have been operating in the Peruvian real estate sector. In 2008, we incorporated Viva GyM to concentrate the group’s activities in this sector including promoting and managing real estate projects including affordable housing and housing and commercial real estate projects.

Zoning Regulations

Article 79 of the Municipalities Organic Law (Law No. 27,972) establishes that municipal governments are the exclusive authority responsible for approving urban and rural development plans, as well as the zoning of urban areas under their jurisdiction. Peruvian regulation states that urban zoning refers to the division of a municipal jurisdiction in zones for specific usage, such as residential, commercial, industrial or mixed-use.

97

The main zoning rules applicable to our real estate projects include the following: obtaining a construction license from the corresponding local municipality before commencing construction, reconstruction, conservation or repair of any property.

Environmental Regulations

The Environmental Protection Regulation for real estate, urbanism, construction and regularization related projects, approved by Supreme Decree No. 015-2012-VIVIENDA (modified by the Supreme Decree No.° 019-2014-VIVIENDA and Supreme Decree No. 0082016-VIVIENDA), sets out to prevent, mitigate, control and remedy negative environmental impacts that may arise from real estate developments. Prior to initiating construction works, companies are required to obtain an environmental authorization from the Housing, Urbanism, Regularization or Construction National Directorate of the Peruvian Ministry of Housing, Construction and Sanitation and to comply with the provisions set forth in the corresponding environmental impact assessment.

The main environmental rules applicable to our real estate projects include the following:

• undertaking an environmental impact assessment; and

• requesting the environmental classification of our projects, which depends on the environmental risks associated therewith.

Licenses

Article 10 of the Single Revised Text of the Urban Habilitation and Buildings Law No. 29090, approved by Supreme Decree No. 006-2017, establishes the license requirements for urban habilitation and construction, depending on land size, the dimensions of the work to be undertaken and the financial target.

Upon completion of the real estate development and construction stages, as the case may be, the following requirements must be met:

• for urban development, the reception of the works (recepción de la obra) must be requested to the corresponding municipal government in compliance with Article 19 of the Single Revised Text of the Urban Habilitation and Buildings Law; and

• for construction, the conformity of the works (conformidad de obra) must be requested to the corresponding municipal government in compliance with Article 28 of the Single Revised Text of the Urban Habilitation and Buildings Law, accompanying the request with the construction plans and the construction statement (a description of the technical conditions and characteristics of the work performed).

Exclusive and Common Property Real Estate Units Regimes

The Law on the Buildings Regularization, on the Factory Declaration Proceeding and on the Exclusive and Common Property Real Estate Units Regime, approved by Law No. 27157, establishes the legal regime applicable to real estate comprised of assets with exclusive and common property, including, among others, (i) apartment buildings; (ii) condominiums; (iii) units under co-ownership; and (iv) commercial spaces, such as galleries and malls. The foregoing construction projects must include internal by-laws prepared or approved by the sponsor or builder, or by the owners with the vote of the majority of participating owners, the content of which is regulated in Article 42 of the aforementioned law. Articles 40 and 41 of the foregoing law itemize the assets and services that qualify as common.

Owners of real estate units have the opportunity to choose between the exclusive and common property regime, and the independent and co-ownership regime. The internal by-laws, the owner’s assembly minutes, all construction plans, architectural division plans, perimetric boundaries and the construction statement must be registered in the Real Estate Registry of the corresponding jurisdiction. Upon completion of the proper registries, units are registered independently from one another.

98

Fondo Mivivienda

The acquisition of affordable housing units developed by Viva GyM is often financed by Fondo Mivivienda S.A., a publicly owned financial institution established in 1998 by Law No. 26912, with the purpose of (i) promoting and financing the acquisition, bettering and construction of houses, especially those of social interest; (ii) carrying out activities related to the fostering of capital flows to the housing financing market; (iii) participating in the primary and secondary markets of mortgage credits; and (iv) contributing to the development of the capital markets.

Prevention of Money Laundering and Financing of Terrorism

SBS Resolution No. 789-2018 (that has replaced SBS Resolution No. 486-2008 as of March 15, 2018), as amended from time to time, requires construction and real estate companies to implement a money laundering and terrorism financing prevention system, including, among others, appointing a compliance officer, setting a registry of operations and notifying the Financial Intelligence Unit of the SBS, the entity responsible for supervising and enforcing compliance to the resolution referred to herein, of any suspicious activity.

Public- and Private-Sector Contracts

Concar provides services in compliance with Peru’s Public Procurement Law and its Regulations, approved by Supreme Decree No.° 082-2019-EF (Texto Único Ordenado de Ley de Contrataciones del Estado) and its Regulations, approved by Supreme Decree No. 344-2018, when dealing with public counterparties; and with the regulation set forth in the Civil Code when dealing with private counterparties. Such regulations establish the different types of selection processes which companies may undergo when contracting with the state, as well as the rules and conditions applicable to such processes. They also establish general rules applicable to contractual relationships among private parties. See “—Engineering and Construction” for more information on the applicable legal frameworks. Concar is registered with the Peruvian National Registry of Suppliers, required to act as supplier for public entities.

Intellectual Property

Certain operations of GMI are protected by Peruvian Copyright Law, approved by Legislative Decree No. 822, specifically the engineering drawings registered in the INDECOPI Copyright Registry. However, the company’s business and profitability are not dependent on patents or licenses; industrial, commercial or financial contracts in connection to patents or licenses; or new manufacturing processes.

99

C. Organizational Structure

The following organizational chart sets forth our principal operating subsidiaries within our three business segments.

(1) 57.7% of GMI shares have been assigned to a trust formed in benefit of the Peruvian state to secure the company’s contingent obligation to pay compensation resulting from the investigations of the company by the Peruvian state. See “Item 3.D.-Key Information-Risk Factors-Risks Related to Recent Developments (2017-2020)- Investigations regarding potential corruption or other illegal acts could have a material adverse effect on our business, financial condition and results of operations”.

(2) In June 2018, the company assigned economic rights over 48.8% of the share capital of Norvial to Inversiones en Autopistas S.A. by transferring its Class B shares of Norvial. The company continues to possess 67% of the voting rights of Norvial and an economic interest of 18.2% of Norvial’s share capital. JJC Contratistas Generales S.A. owns 16.8% of Norvial’s shares, and Inversiones en Infraestructura S.A owns the remaining 16.2%.

(3) 43.3% of the share capital of Viva GyM is held by our subsidiary GyM.

The following charts set forth the principal activities of each of our three business segments:

The following is a brief description of our principal operating subsidiaries:

• Engineering and Construction:

• GyM S.A. (“GyM”), incorporated in Peru, is one of the oldest and largest construction companies in Peru. Graña y Montero owns 98.87% of GyM; the remaining 1.13% is held by former and current company executives.

• Vial y Vives—DSD S.A. (“Vial y Vives—DSD”), incorporated in Chile, is an engineering and construction company specialized in the mining sector and in providing services to the energy, oil and gas, and cellulose sector. GyM, through GyM Chile SpA, owns 94.49% of Vial y Vives—DSD; Inversiones VyV S.A., a company controlled by the founders of Ingeniería y Construcción Vial y Vives S.A., (which merged to form Vial y Vives—DSD) owns 1.36%; and the remaining 4.15% is held by third parties.

100

• GMI S.A. Ingenieros Consultores (“GMI”), incorporated in Peru, is primarily engaged in engineering consultancy for projects in the mining, hydrocarbons, electrical, agricultural, industrial, tourism and transportation sectors. Graña y Montero owns 89.41% of GMI (57.7% of GMI shares have been assigned to a trust created in benefit of the Peruvian state to secure the company’s contingent obligation to pay compensation to the Peruvian state in respect of investigations of the company by the Peruvian state), 5.0% is held by current and former company executives; and the remaining 5.59% is held by third parties.

• Morelco S.A.S. (“Morelco”), incorporated in Colombia, is a recognized specialist in electromechanical assemblies, civil works, and services for the oil and gas and other energy sectors. Our subsidiary GyM S.A. owns 70.0% of Morelco, and the remaining 30% is held by the Serna family in trust.

• Infrastructure:

• Toll Roads:

• Norvial, incorporated in Peru, is the concessionaire of the 183 km stretch between Ancón and Pativilca of the Panamerican Highway. Norvial is comprised of common shares (Class A), and non-voting shares (Class B). In June 2018, the company transferred economic rights over 48.8% of the share capital of Norvial to Inversiones en Autopistas S.A. by transferring its Class B shares. The company continues to possess 67% of voting rights of Norvial and an economic interest of 18.2% of Norvial’s share capital. JJC Contratistas Generales S.A. owns 16.8% of Norvial shares and Inversiones en Infraestructura S.A owns the remaining 16.2%.

• Survial S.A. (“Survial”), incorporated in Peru, is the concessionaire of the 750 km highway between Marcona and Urcos in Peru. Graña y Montero owns 99.995% of Survial, and the remaining 0.005% is held by Concar S.A.

• Concesión Canchaque S.A.C. (“Canchaque”), incorporated in Peru, is the concessionaire of the 78 km highway between the towns of Buenos Aires and Canchaque in Peru. Graña y Montero owns 99.96% of Canchaque, and the remaining 0.04% is held by Concar S.A.

• Concar S.A., incorporated in Peru, is engaged in the operation and maintenance of infrastructure assets. Graña y Montero S.A.A. owns 99.9983% of Concar and the remaining 0.0017% is held by GyM S.A.

• Mass Transit:

• GyM Ferrovías S.A. (“GyM Ferrovías”), incorporated in Peru, is the concessionaire of Line One of the Lima Metro. Graña y Montero owns 75% of GyM Ferrovías; the other 25% is held by Ferrovías Participaciones S.A., a railway infrastructure company.

• Water Treatment:

• Concesionaria La Chira S.A. (“La Chira”), incorporated in Peru, is the concessionaire of La Chira waste water treatment plant in southern Lima, Peru. Graña y Montero owns 50% of La Chira; the other 50% is held by Acciona Agua S.A, an affiliate of a waste water treatment and distribution company.

101

• Energy:

• GMP S.A. (“GMP”), incorporated in Peru, is engaged in the oil and gas business and provides hydrocarbon extraction services to Perupetro, a Peruvian state oil company; owns a gas processing plant; and, through a joint operation with a Peruvian affiliate of Oiltanking GmbH, operates five fuel terminals in Peru. Graña y Montero owns 95% of GMP; the remaining 5% is held by a former company executive.

• Real Estate:

• Viva GyM S.A. (“Viva GyM”), incorporated in Peru, is focused on the development and sale of affordable housing and housing, as well as other real estate projects such as office buildings and shopping centers. Graña y Montero directly owns 56.2% of Viva GyM, GyM owns 43.3%; and the other 0.46% is owned by a company executive.

D. Property, Plant and Equipment

Approximately 83.8% of our assets are located in Peru, with the remaining balance located in Chile and Colombia. At December 31, 2019, the net book value of the company was US$133.8 million (S/443.9 million). We currently lease certain machinery and equipment from vendors. The term of our leasing contracts ranges from two to five years, depending on the nature of the equipment. Leased machinery and equipment are capitalized for accounting purposes. Our principal executive offices, which we lease, are located at Av. Paseo de la República 4667, Surquillo, Lima 34, Peru and Av. Petit Thouars 4957, Miraflores, Lima 18, Perú.

Insurance and Contingency Planning

We have insurance coverage for fire; strike, riot, malicious damage, vandalism and terrorism; loses or damages to construction machinery and equipment; destruction or disappearance of property; civil liability, including physical harm to third parties; professional liability; transportation; vehicle theft, collision, rollover, fire and accidents; and directors and officers’ liability. Additionally, we carry different policies for specific risks related to our business segments. Our management considers this coverage to be sufficient to cover probable losses and damages, taking into consideration the nature of our activities, the risks involved in our transactions and the advice of our insurance brokers.

We also have contingency plans in place in order to protect our company and the interests of our clients. In the event of an emergency, we have procedures in place designed to minimize any resulting interruption in service to our most critical business processes.

ITEM 4A. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion should be read in conjunction with our consolidated financial statements included in this annual report, which have been prepared in accordance with IFRS issued by the IASB. The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including, without limitation, those set forth under “Part I. Introduction. Forward-Looking Statements” and “Item 3.D. Key Information—Risk Factors.”

102

A. Operating Results

Overview

We are the largest engineering and construction company in Peru as measured by revenues during 2019, and one of the largest publicly traded engineering and construction companies in Latin America as measured by market capitalization as of December 31, 2019, with strong complementary businesses in infrastructure and real estate services. With more than 85 years of operations, we have a long track record of successfully completing the engineering and construction of many of the country’s landmark private and public sector infrastructure projects. Beginning in the mid-1980s, we decided to leverage our engineering and construction expertise into complementary lines of business. We have also undertaken the engineering and construction of large and complex projects outside our home market throughout our history. In addition, we have expanded our activities into other key markets of the Latin American region through the acquisition of businesses with solid positions in those markets.

The Impact of the Ongoing Novel Coronavirus (COVID-19) Pandemic

The ongoing COVID-19 pandemic and government measures to contain the spread of the virus are disrupting economic activity, and consequently adversely affecting our business, results of operations and financial condition. As conditions are recent, uncertain and changing rapidly, it is difficult to predict the full extent of the impact of the pandemic. If conditions persist, however, it is likely that the pandemic and the related government measures will have a material adverse effect on the company.

Countries around the world—including Peru as well as Chile and Colombia—have adopted extraordinary measures to contain the spread of COVID-19, including imposing travel restrictions, requiring closures of non-essential businesses, establishing restrictions on public gatherings, instructing residents to practice social distancing, issuing stay-at-home orders, implementing quarantines and similar actions. Depending on how the spread of the virus evolves, governments may extend these measures for longer periods. As of the date of this annual report, Peru has extended certain extraordinary measures until June 30, 2020, while Chile and Colombia have extended extraordinary measures until September 18, 2020 and August 31, 2020, respectively.

The COVID-19 pandemic and the related government measures have significantly increased economic uncertainty and are likely to cause a global recession. According to recent projections from the International Monetary Fund, during 2020, the global economy is expected to contract by 3.0%, with Latin America expected to contract 5.2% and Peru, Chile and Colombia, in particular, expected to contract 6.5%, 4.5% and 2.7%, respectively. Moreover, the impact of the pandemic on economic activity has been sudden and severe, and we cannot predict the extent to which the economies in the countries where we operate will ultimately be impacted.

From mid-March until the end of May 2020, substantially all of our engineering and construction projects, particularly in Peru, and real estate projects, were mandatorily shut down. Although certain projects are gradually resuming, we cannot assure you when we will be able to resume work in full. Our infrastructure operations, which have for the most part been declared essential businesses, have continued; however, certain of our infrastructure businesses have been adversely affected, in particular, by the sharp decline in traffic volumes and oil and gas prices (also due to the dispute in March among OPEC member countries). Additionally, the Peruvian Congress has suspended the payment of tolls on roads during the period of quarantine, although the Peruvian executive branch has initiated an action to declare the congressional prohibition on collecting tolls unconstitutional, and the company is evaluating its legal options.

Based on preliminary data, we estimate that the company’s consolidated revenues for the month of April 2020 amounted to approximately S/150.3 million (US$44.4 million), a decrease of 43.5% as compared to April 2019; consolidated net income for the month of April 2020 amounted to approximately S/(15.8) million (US$(4.7) million), a decrease of approximately 49.8% as compared to April 2019; and consolidated EBITDA amounted to approximately S/14.7 million (US$4.3 million), a decrease of approximately 36.2% as compared to April 2019. On a segment basis, based on preliminary data, we estimate that: (i) E&C revenues for April 2020 amounted to approximately S/95.2 million, a decrease of 39.3% as compared to April 2019; E&C net income for the month of April 2020 amounted to approximately S/(5.5) million; and E&C EBITDA for the month of April 2020 amounted to approximately S/5.0 million; (ii) Infrastructure revenues for April 2020 amounted to approximately S/68.8 million, a decline of 51.2% as compared to April 2019; Infrastructure net income for the month of April 2020 amounted to approximately S/(3.3) million; and Infrastructure EBITDA for the month of April 2020 amounted to approximately S/11.6 million, a decline of 64.5% as compared to April 2019; and (iii) Real Estate revenues for month of April 2020 amounted to approximately S/476 thousand, a decrease of 95.9% as compared to April 2019; Real Estate net income for the month of April 2020 amounted to approximately S/(734) thousand; and Real Estate EBITDA for the month of April 2020 amounted to approximately S/(713) thousand. We believe that our results of operations during the month of May will, for the most part, reflect substantially similar trends as those of the foregoing preliminary estimates for the month of April, as a result of the impact of COVID-19 and the government measures to limit the spread of the virus. Our preliminary data for the month of April and our expectations for the month of May is subject to change, potentially in material respects.

103

Because the extent of the COVID-19 pandemic and its impact on the industries in which we operate cannot be predicted at this time, the full extent to which COVID-19 will impact our business, results of operations and financial condition is currently unknown. We believe that the severity of the impact on the company will depend, to a large extent, on how long the crisis continues.Our results of operations for the first quarter of 2020 were adversely impacted by the COVID-19 pandemic. The impacts may also include additional allowances for certain accounts receivable and impairments to the group’s long-term assets. We expect that our results of operations for the second quarter of 2020 will be significantly more impacted, as adverse conditions have persisted for a longer period during the second quarter. We do not expect our financial performance to improve until current restrictions designed to confront COVID-19 are lifted and economic activity and, eventually, capital investment resume, which will depend, to a large degree, on health concerns from the pandemic subsiding and on the recovery of economic conditions. For more information, see notes 4.4 and 37 to our audited annual consolidated financial statements included in this annual report.

We are taking significant measures to mitigate the impact of the crisis on the company. Among other measures, we are prioritizing the health and safety of our employees, as well as the medium-term sustainability of their employment. Certain actions we are taking include: the design and implementation of protocols to return to project sites, the creation of new office layouts to be compliant with social distancing guidelines, the development of telecommuting schemes, and other cost-saving initiatives. For more information on measures we are evaluating to reduce expenses, see “—Liquidity and Capital Resources.”

Recent Developments (2017—2020)

We participated in six construction and operation of infrastructure projects in Peru with affiliates of Odebrecht during the period from 2005 to 2017 (known as: IIRSA South (tranches II and III); IIRSA North; Tranches 1 and 2 of the Lima Metro; Gasoducto Sur Peruano; and Chavimochic. Our stakes in these projects ranged from 17% to 33%. None of these projects have been operating since February 2017.

In December 2016, Odebrecht entered into a plea agreement with U.S., Brazilian and other authorities in which they admitted to making illegal bribery payments in connection with projects in various countries, including Peru. These projects include certain consortia in which we participated. As a result of the plea agreement, Peruvian authorities have initiated criminal investigations against our company and certain of our former directors and senior management.

Additionally, on January 24, 2017, the Peruvian government terminated the gas pipeline concession held by GSP, a consortium in which we participated with Odebrecht affiliates, due to failure of GSP to obtain the required project financing by the stipulated deadline. The termination of the GSP gas pipeline concession, despite the government payment contemplated under the concession contract, has had a material impact on our consolidated financial results and backlog.

See “Item 3.D. Key Information—Risk Factors —Risks Related to Recent Developments (2017—2020).”

Termination of the Gasoducto Sur Peruano Concession

In September 2015, we entered into a memorandum of understanding to invest US$215 million (S/722 million) for a 20% stake in GSP, a company that had previously been awarded the concession for the design, construction and operation of the southern gas pipeline, a project to deliver natural gas to the southern region of Peru, particularly to the provinces of Cuzco, Arequipa, Puno and Moquegua. With our 20% investment commitment made on November 2, 2015, an affiliate of Odebrecht owned a 55% interest and an affiliate of Enagás International, S.L. (“Enagas”) owned a 25% interest in GSP.

On January 24, 2017, the Peruvian government terminated the concession due to GSP’s failure to obtain the required project financing by the stipulated deadline. As a result, we recognized impairments with respect to our investment in and long term account receivables from GSP and our participation in CCDS.

104

Pursuant to the concession contract, the Peruvian government is required to carry out an auction process to sell GSP’s assets and obtain a new concessionaire within one year of the contract termination, with the funds raised in the sale to be used to pay the existing concessionaire for its investment in the project. The amount of the termination payment is required to be no more than 100% and no less than 72.25% of the net carrying amount (valor contable neto), as defined in the concession contract. Consequently, the auction process should initiate with a base price equivalent to 100% of the net carrying amount. If the auction is unsuccessful in the first round, the government is required to undertake a second round, with a base price equal to 85% of the net carrying amount; and, if the second round is unsuccessful, the government is required to undertake a third round, with a base price equal to 72.25% of the net carrying amount. If a successful bidder is not obtained from such auction processes within one year of the termination of the contract, the government shall pay the concessionaire a termination payment equal to 100% of the net carrying amount.

The Peruvian Ministry of Energy and Mines announced in April 2017 that the auction process for the new concessionaire of the project assets would be carried out during the first quarter of 2018. A third party was appointed, through an adjudication process, as temporary custodian and administrator of the gas pipeline assets until the new bidder is awarded the concession. However, since that time, the Peruvian government has not indicated an intention to commence the auction process.

In 2016, in connection with efforts to restructure or sell Odebrecht’s participation in GSP, due to the corruption scandal surrounding Odebrecht, Odebrecht contractually agreed to subordinate its claims under the concession to the other project partners, Enagas and ourselves. As a result, we and Enagas may be entitled to repayment of our percentage payment under the concession contract prior to Odebrecht. In January 2018, Odebrecht commenced arbitration proceedings against us, our subsidiary GyM and Enagas, seeking to invalidate the contractual subordination, but Odebrecht subsequently withdrew the claim.

On December 4, 2017, GSP voluntarily commenced bankruptcy proceedings in Peru. GSP’s assets will be liquidated pursuant to Peruvian law. GSP’s only substantial asset is the claim for government payment described above, as contemplated under the concession contract in the event of termination.

Although the concession contract provides that payment must be made within one year of termination, the Peruvian Ministry of Energy and Mines has not made payment or, to our knowledge, initiated the payment process or the auction process for a new concessionaire. As a result, after the six-month period mandated by the concession contract for the parties to discuss the matter, in October 2019, we asserted our rights against the Peruvian government by filing a request for arbitration before the International Centre for Settlement of Investment Disputes. However, in December 2019 we withdrew our request for arbitration, as required by Peruvian authorities under the preliminary settlement and cooperation agreement we entered into with Peruvian anticorruption prosecutor and the ad hoc Peruvian state counsel.

We made total investments in the GSP project of US$243 million (S/811 million), which we financed in part with borrowings. We also assumed our proportional obligation to repay the project’s bridge loan in an amount of US$129 million (S/436 million) and the project’s performance guarantee in amount of US$52.5 million (S/177 million) and recorded them as other financial liabilities and other accounts payable, respectively, in our consolidated financial statements. We also recorded an account receivable for the same amounts, since we have the right to collect these amounts from GSP. According to our estimates, under the terms of the concession contract, taking into account the subordination arrangement, and based on receiving payment equal to 72.25% of the net carrying amount, in accordance with IFRS, in 2016 we recorded an impairment to our equity investment in GSP in the amount of S/593.1 million (approximately US$175.5 million) to reflect a write-off of equity value in GSP. Although GSP’s right to compensation pursuant to the concession contract, due to the Peruvian government’s failure to pay, is 100% of the net carrying amount, our company had accounted for 72.25% due to political uncertainty, GSP’s bankruptcy process with INDECOPI, and disagreements with the other GSP shareholders. In addition, during 2016 our gross profit decreased by S/15.2 million (US$4.5 million) due to the impact of the early termination of the construction consortium (Consorcio Ductos del Sur), in accordance with IFRS. Also during 2016, we registered a discount of the related long term account receivable in financial expenses of S/77.4 million (US$22.9 million) and wrote off S/180 million (US$54 million) in respect of the deferred income tax asset. In addition, the termination of the GSP gas pipeline concession reduced our backlog as of December 31, 2016 by US$855 million (S/2,889.0 million), representing 30.2% of our E&C backlog and 33.8% of our total backlog. After taking into account these effects, we recorded, S/654.8 million (US$197.3 million) in connection with our investment in GSP, and S/2,079.2 million (US$627.6 million) in related receivables, as of each of December 31, 2016, 2017 and 2018.

105

As of December 31, 2019, as a result of the withdrawal of our request for arbitration against the Peruvian government in December 2019, we impaired the remaining amount of our investment in GSP. Also in 2019, taking into account that a meeting of GSP creditors has yet to occur and that GSP’s bankruptcy proceedings remain in the debt recognition stage, we recognized an impairment of US$81.5 million (S/276 million) to our long-term account receivable from GSP, based on our estimate that GSP is likely to recover 50% (rather than the previous estimate of 72.25%) of the net carrying amount; we adjusted the net present value of the remaining account receivables by US$17 million (S/58 million) pursuant to IFRS rules; and we wrote-off US$54 million (S/180 million) over the deferred income tax asset associated with the company’s investment in GSP. As of December 31, 2019, after taking into account these effects, we continue to maintain S/544 million (US$164 million) in long-term receivables as a creditor of GSP.

The effects of the termination of the GSP gas pipeline concession recorded in our consolidated financial statements are based on our estimates, based on the terms of the concession contract and with the information that we have available to date. The actual impact on our results, however, could change materially from our estimates. Moreover, we cannot assure you that we will receive any benefit from the government payment provided for under the GSP gas pipeline concession contract on a timely basis, or at all. For more information, see note 5(e) to our audited annual consolidated financial statements included in this annual report.

Ongoing Investigations

Our company and certain of our subsidiaries, and certain of our former directors and senior management, have been charged in connection with criminal and civil investigations relating to certain of our projects in connection with our association with Odebrecht and in connection with our alleged participation in what is referred to as the “construction club.”

In connection with investigations relating to the IIRSA South project concession (tranche II), the Peruvian criminal prosecutor moved to charge our company and our construction subsidiary, GyM, as criminal defendants in connection with the project. In response, the Peruvian First National Preparatory Investigation Court (Primer Juzgado de Investigación Preparatoria Nacional) notified us of its decision to formally include our company and GyM in its criminal investigation. We appealed the court’s decision and, in June 2018, the First Court of Appeals of the Superior Court of Lima revoked the judicial order that indicted our company and GyM, among other corporate defendants, in the criminal investigation on charges of collusion and other crimes and rejected the petition, without prejudice, made by the prosecutor to incorporate both companies in the aforementioned process. Nevertheless, in February of 2020, we were notified that the criminal prosecutor had filed a new motion to bring criminal charges against our company and GyM in connection with the IIRSA South project concession (tranche II). We cannot predict the outcome of this motion.

Separately, in connection with these investigations, in December 2018, the Peruvian First National Preparatory Investigation Court resolved to include our company and GyM as civilly-responsible third parties in the investigations related to the IIRSA South project concession tranche II and GyM as a civilly-responsible third party in the investigations related to Tranches 1 and 2 of the Lima Metro. These proceedings are ongoing.

Peruvian prosecutors have included José Graña Miró Quesada, a shareholder and the former Chairman of our company, in an investigation for the crime of collusion, and Hernando Graña Acuña, a shareholder, a former board member of our company and former chairman of our subsidiary GyM, for the crime of money laundering against the Peruvian government, each in connection with the IIRSA South project concession tranche II, in which we participated with Odebrecht. Gonzalo Ferraro Rey, the former Chief Infrastructure Officer of our company, has also been included in an investigation for the crime of money laundering in connection with the same project. In addition, José Graña Hernando Graña, as well as Juan Manuel Lambarri, the former chief executive officer of our subsidiary GyM, have been charged in connection with Tranches 1 and 2 of the Lima Metro project. In August 2019, José Graña indicated in public statements to the media that he and Hernando Graña had initiated a process of plea bargaining with Peruvian prosecutors in respect of multiple projects in which our company participated with Odebrecht and in respect of the alleged “construction club.” According to José Graña’s public statements, in the plea bargaining process, both he and Hernando Graña are cooperating with the Peruvian prosecutor, which may include providing information related to wrongdoing or knowledge of improper behavior while they were at the company. However, given the confidential nature of these proceedings, the reported information is limited and difficult to verify. We cannot assure you what they will ultimately say to the government, or that their statements will not adversely affect the company’s business.

INDECOPI initiated in 2017 investigations regarding allegations that certain construction companies in Peru, including our subsidiary GyM, colluded as a “construction club” to receive public contracts. In February 2020, INDECOPI initiated an administrative proceeding against several construction companies, including our subsidiary GyM, aiming to impose civil fines on the investigated companies.

106

Separately, in December 2018, GyM was formally included as a civilly-responsible third party, along with eleven other construction companies, in the criminal investigation conducted by a Peruvian public prosecutor based on facts similar to those under investigation by INDECOPI. In December 2019, the prosecutor criminally charged GyM and another of our subsidiaries, CONCAR, and other companies in the construction sector in Peru, as well as a former director and senior management of our company, with collusion and other alleged crimes.

The company’s management has made estimates, and established provisions, in the company’s audited consolidated financial statements for the investigations in respect of the company and its subsidiaries, including with respect to the company’s alleged participation in investigations of what is referred to as the “construction club”.

In December 2019, we entered into a preliminary settlement and cooperation agreement with the Peruvian anticorruption prosecutor and the ad hoc Peruvian state counsel in respect of investigations relating to past projects in which the company participated with Odebrecht and investigations relating to an alleged participation in the “construction club”. The terms of the preliminary settlement and cooperation agreement are confidential in accordance with Peruvian law and under discussion with Peruvian authorities. Although in the preliminary settlement and cooperation agreement, the Peruvian government undertook to enter into a final settlement and cooperation agreement within sixty business days, we have not reached a final agreement, and the parties continue to discuss the terms of the settlement.

A conviction of corruption or settlements with government authorities could lead to criminal and civil fines as well as penalties, sanctions, injunctions against future conduct, profit disgorgement, disqualifications from directly and indirectly engaging in certain types of business, the loss of business licenses or permits, debarment from contracting or from participating in bidding processes with the Peruvian government, or other restrictions. Moreover, our alleged involvement in corruption investigations, and any findings or admissions of wrongdoing in such investigations, could further damage our reputation and have a material adverse impact on our ability to compete for business. In addition, such investigations may affect the company’s ability to secure financing in the future. Furthermore, investigations could continue to divert management’s attention and resources from other issues facing our business.

Emergency Decree and Subsequent Legislation

In February 2017, the President of Peru issued an emergency decree (Decreto de Urgencia No. 003-2017), prohibiting groups that have been, or whose officers or representatives have been convicted of, or have admitted to, corruption, money-laundering or similar crimes (whether in Peru or elsewhere) from, among other things, transferring or selling any assets related to investments in Peru, including the proceeds of asset or equity sales, or sending money abroad without a governmental authorization. Section II of Law 30737, passed in March 2018 to replace the aforementioned emergency decree, includes companies that have been partners of groups that have been, or whose officers or representatives have been, convicted of, or have admitted to, corruption, money-laundering or similar crimes. Our company and our subsidiary GyM are two such companies. The law requires that they: suspend money transfers abroad; implement a compliance program and disclose information to competent authorities; and create a trust of assets to guarantee eventual compensation in favor of the Peruvian government. The Peruvian government is required to determine the amount of such guarantee pursuant to Law 30737. On May 9, 2018, Supreme Decree No. 096-2018-EF was passed, which provides guidelines for such determination.

Following discussions with the Peruvian government, in February 2019, we established a trust in favor of the Peruvian government in respect of any liabilities arising from Tranches 1 and 2 of the Lima Metro project and Tranche II of the IIRSA project, to which we assigned shares of our subsidiary GMI, which is estimated to be worth approximately US$23.4 million (S/79.1 million). We cannot assure you that the Peruvian government will not claim the assets set forth in this trust or require that our company place additional assets in trust, nor can we assure you that these assets will fully satisfy any eventual obligations we may have to the Peruvian government.

Management has estimated the value of the company’s contingencies to be approximately US$84.4 million (S/279.8 million), and taking into account the net present value, established a provision in the company’s financial statements in the amount of US$46.6 million (S/153.9 million). This includes amounts in respect of probable liabilities arising from the investigations of the IIRSA South concession (tranche II), Tranches 1 and 2 of the Lima Metro project, the GSP project and the “construction club” investigation. We cannot provide assurance that our liability will not exceed the amount estimated by management and provisioned for in the financial statements of the company. Furthermore, if the company is investigated for further charges in connection with wrongdoing in respect of other projects, this contingent amount could increase significantly. For more information, see note 1 to our audited annual consolidated financial statements included in this annual report.

107

Debt Related to GSP

In connection with the termination of the GSP concession, we renegotiated and subsequently repaid in full the following debt instruments:

• Syndicated Loan Related to our Equity Investment in GSP: As a result of the termination of the GSP gas pipeline concession, our syndicated loan used to finance our equity investment in GSP became due. The principal amount outstanding under our syndicated loan was US$150 million (S/504 million) as of the termination of the concession in January 2017. On June 27, 2017, we entered into an amendment to the credit agreement, pursuant to which our syndicated loan was to mature in 2020, with required prepayments to be made with the proceeds of asset sales, 40% of which were to be paid during the first year following the amendment, and 30% of which were to be paid during the second year following the amendment. The syndicated loan accrued interest at LIBOR plus 4.90% per year. Concurrent with the amendment, we also provided additional security interests, including: (i) a first priority lien on our shares of GyM and Concar; (ii) a second priority lien on our shares of Almonte; (iii) a first priority lien on certain real estate properties in Surquillo, Peru; (iv) liens on certain related accounts; (v) a second priority lien on our shares of CAM and CAM Servicios; and (vi) a first priority lien on cash flows from the sale of certain assets. On June 26, 2019, the loan was repaid in full.

• Proportional guarantee of the GSP Bridge Loan: As a result of the termination of the GSP gas pipeline concession, our proportional guarantee of the GSP bridge loan became due. On June 27, 2017 we entered in a new US$78.7 million (S/264.8 million) term loan with Natixis, BBVA, SMBC and MUFJ, the proceeds of which were used to repay the GSP bridge loan. The new term loan was to mature in 2020, with required prepayments to be made with the proceeds of asset sales, 40% of which were to be paid during the first year following the amendment, and 30% of which were to be paid during the second year following the amendment. The term loan accrued interest at LIBOR plus 4.50% per year, which increased to LIBOR plus 5.00% during the second year and to 5.50% during the third year. Also, we provided the following security interests to secure repayment of the term loan: (i) a first priority lien on our rights to receive the termination payment derived from the GSP termination, (ii) a second priority lien on our shares of GyM and Concar; (iii) a second priority lien on our shares of Almonte; (iv) a second priority lien on certain real estate properties in Miraflores and Surquillo; (v) a second priority lien on our shares of CAM and CAM Servicios; and (vi) a first priority lien on cash flows from the sale of certain assets. On June 28, 2019, the term loan was repaid in full.

• Proportional Repayment Obligations under the GSP Performance Guarantee: Upon the termination of the GSP gas pipeline concession, our proportional repayment obligations under the GSP performance guarantee from Chubb Insurance Company in the amount of US$52.5 million (S/177.4 million) became due. On December 6, 2018, we paid the final installment with respect to our obligations to Chubb Insurance Company.

For more information, see —Liquidity and Capital Resources—Indebtedness.

Asset Sales

In order to strengthen our liquidity and financial flexibility, particularly in the event of potential delays in receiving the government payment contemplated under the GSP gas pipeline concession contract, and make payments on our debt related to the GSP project, we sold the following assets:

• Sale of Cuartel San Martín: On February 3, 2017, our subsidiary Viva GyM sold all of its interests in the Cuartel San Martín real estate project, which represented a 50% stake in the project, to its partner Urbi Propiedades S.A. for US$50 million (S/163 million);

108

• Sale of Promoción Inmobiliaria del Sur: On February 24, 2017, our subsidiary Viva GyM sold all of its interests in PRINSUR, which owns undeveloped land located in Lurín, representing 22.5% of the share capital, to its partner Inversiones Centenario S.A.A. for US$25 million (S/81 million);

• Sale of Shares in Red Eagle Mining Corporation: In February and March 2017, our subsidiary Stracon GyM sold shares of Red Eagle Mining Corporation, representing 9.97% of the share capital, in a stock exchange transaction for US$13.3 million (S/43.0 million);

• Sale of our Interest in COGA: On April 24, 2017, we sold our 51% interest in COGA to our partners Enagas and Carmen Corporation for a price of US$21.5 million (S/69.8 million). COGA is in charge of the operation and maintenance of TGP, the trans-Andean gas pipeline from Camisea to the Pacific coast in Peru;

• Sale of our Interest in GMD: On June 6, 2017, we sold our 89.19% interest in GMD, our IT services subsidiary, to Advent International for a price of US$84.7 million (S/269.9 million);

• Sale of the building Petit Thouars: On September 29, 2017, we sold a building located in block 49 of Petit Thouars Avenue to VOLCOMCAPITAL Deuda Perú for a price of US$20.5 million (S/68.9 million);

• Sale of Almonte properties. On May 31, 2018, Almonte signed an agreement to sell 4,208,769 square meters of land for an aggregate price of US$92.7 million. The amount of the sale proceeds corresponding to our company is proportional to its 50.45% ownership stake; and

• Sale of our interest in CAM Chile and CAM Servicios: On December 4, 2018, we sold our 73.16% interest in CAM Chile and CAM Servicios, our subsidiaries engaged in the operation and maintenance of electric utilities, to GDF Suez Energie Services Chile Holding SpA and ENGIE Services Perú S.A., for a price of US$18.75 million (S/63.34 million).

• Investment Agreement for Norvial Dividends: On June 11, 2018, we signed an investment agreement with BCI Perú, to monetize future dividends of Norvial. The amount of the transaction is US$42.3 million, the proceeds of which were applied to the reduction of indebtedness related to GSP.

• Sale of Stracon GyM: On April 11, 2018, we sold our 88% interest in Stracon GyM for a price of US$77 million (S/249 million).

In addition, we are in the process of marketing for sale our subsidiary Adexus, which entered into Chilean bankruptcy proceedings on November 19, 2019. We are also evaluating the sale of certain additional assets, including part of our land bank, which we do not consider to be strategic to our business, to meet our liquidity needs as a result of the impact of the COVID-19 pandemic and government measures to contain the spread of the virus.

Internal Investigation

We conducted an internal investigation led by U.S. counsel with the assistance of forensic accountants with respect to our participation in consortia with Odebrecht. The Risk, Compliance and Sustainability Committee of our board of directors was charged with overseeing the internal investigation. This internal investigation, which concluded on November 1, 2017, identified no evidence to conclude that any company personnel engaged in bribery in connection with any of our company’s public projects in Peru with Odebrecht or its subsidiaries, or that any company personnel was aware of, or knowingly participated in, any corrupt payments made in relation to such projects.

Subsequently, in August 2019, José Graña Miró Quesada, a shareholder and the former chairman of our company, indicated in public statements to the media that he and Hernando Graña Acuña, a shareholder and former board member of our company and the former chairman of our subsidiary GyM, had initiated a process of plea bargaining to cooperate with Peruvian prosecutors in respect of multiple projects in which our company participated with Odebrecht and in respect of the alleged “construction club.” According to news reports, in the plea bargaining process, José Graña and Hernando Graña may have provided information related to wrongdoing or knowledge of improper behavior while they were at the company; however, given the confidential nature of these proceedings, the reported information is limited and difficult to verify. Any admission or other evidence of wrongdoing or knowledge of improper behaviour by José Graña or Hernando Graña in respect of our participation in consortia with Odebrecht would be inconsistent with information gathered during the internal investigation and would have a material impact on the findings of the internal investigation.

109

As new information about the various Peruvian criminal investigations of the company emerged, and news that the company’s former chairman and director were plea bargaining with Peruvian authorities, the company’s board of directors continued to investigate the allegations that were the subject of the investigations, including matters relating to the “construction club,” which was beyond the scope of the internal investigation conducted by U.S. counsel. After an extensive and detailed review process, in line with its commitment to transparency and integrity, the company shared information relevant to the investigations with the Peruvian authorities within the framework of a plea bargain process.

In December 2019, we entered into a preliminary settlement and cooperation agreement with Peruvian authorities. The terms of the preliminary settlement and cooperation agreement are confidential in accordance with Peruvian law and under discussion with Peruvian authorities. Although in the preliminary settlement and cooperation agreement the Peruvian government undertook to enter into a final settlement and cooperation agreement within sixty business days, we have not reached a final agreement, and the parties continue to discuss the terms of the settlement.

New CEO, New Board of Directors and Board Committee

On February 27, 2017, our former chairman of the board, our former CEO and board member, and our board member and the former chairman of the board of our subsidiary GyM resigned from their positions. Effective March 2, 2017, we appointed a new CEO. On March 31, 2017, our shareholders at the annual shareholders’ meeting appointed a new board of directors, replacing seven of our nine existing directors, two of which subsequently resigned and were replaced in July 2018 and December 2018. An additional board member resigned and was replaced in May 2019. For more information, see “Item 6. Directors, Senior Management and Employees.”

Strengthening of Anti-Corruption Program

In 2017, we approved a plan to continue strengthening our anti-corruption compliance program, an integral part of our larger Corporate Risk and Compliance Program. We launched a plan in which we focused on cultural changes and four strategic elements to re-shape the way we do business. The plan emphasized: (i) corporate governance, (ii) ethics and compliance, (iii) risk management, and (iv) regulatory compliance and monitoring.

In line with the plan, in 2017, shareholders appointed a new board of directors with a majority of independent board members, as described further below. The new board of directors created the Risk, Compliance and Sustainability Committee (whose participants today include four board members), created the Corporate Risk and Compliance Function, reporting directly to the board of directors, hired an internationally experienced Chief Risk and Compliance Officer and provided this new corporate function with additional resources, such that by mid-2018, the Corporate Risk and Compliance Function included ten officers. In parallel, the new board of directors launched an integrity manifesto and conducted an internal investigation, led by U.S. counsel with the assistance of forensic accountants, with respect to our participation in consortia with Odebrecht. These actions served as the foundation for a cultural change; the enhancement of the tone at the top; and the transformation and enhancement of anti-corruption practices across the group. In parallel, international advisors and top consulting firms provided specialized anticorruption training to the board of directors, senior management and middle management.

In 2018, the Corporate Risk and Compliance Program re-launched key aspects of the program, focused on ethics and compliance. The first accomplishment was the approval, implementation and training of the company’s new Code of Business Conduct, which was rewritten by senior management. Another key achievement was the whistleblower mechanism, which we revamped and relaunched. Together with the business operations functions, we also reviewed and modernized our policy on third party due diligence (focused on anticorruption, crime prevention and international sanctions), which included building a robust process using international best practices and modern web-based tools for name search and case management.

110

Risk was the program’s focus in 2019, while we continued to implement other aspects of the program. The board of directors formalized the company’s risk management methodology and risk appetite and approved the risk manual. Business operations redesigned certain risk processes and developed risk matrices, guided by the professional opinion of business line experts, as additional foundation for a modern risk management function. This included the use of an enhanced method to measure and mitigate corruption risk. In 2019, the company also introduced revised policies on donations, gifts and entertainment, on dealing with conflicts of interests, and on managing relationships with government officials.

In 2020, we expect to focus the Corporate Risk and Compliance Program’s development on regulatory compliance and on monitoring, including policies to ensure that regulations are implemented and monitored, and that progress is reported internally, together with the continued improvement of other aspects of the Corporate Risk and Compliance Program.

Securities Class Action

A class action civil lawsuit was filed in 2017 against our company and certain of our former directors and former and current executive officers in the United States. In February 2020, we executed a term sheet with the plaintiffs that provides the general terms and conditions for a final settlement agreement. The term sheet stipulates a settlement amount of US$20 million plus interest after a certain time period. The company recorded provisions of US$15 million as of December 31, 2019, and the remaining US$5 million is expected to be covered by the company’s D&O insurance. It is not certain whether the negotiation of a final settlement agreement will be successful, and, if so, whether any such agreement will be approved by the court. If a final settlement is not rendered and approved by the court, we would expect the lawsuit to resume.

Restatement of Financial Results for Fiscal Year 2017

Our consolidated financial statements for the year ended December 31, 2017 included in this annual report were restated. In our consolidated financial statements included in our annual report on Form 20-F for the year ended December 31, 2017, we inadvertently presented the gain on the sale of GMD under “Gain from the sale of investments” in error and, accordingly, we have restated our 2017 income statement and the related notes to reflect GMD as a discontinued operation. The previously issued consolidated financial statements of the company for the 2017 fiscal year (and the related audit opinion) included in the company’s annual report on Form 20-F for the year ended December 31, 2017 should not be relied upon. For more information, see note 2.31 to our audited annual consolidated financial statements included in this annual report.

Reclassification

On June 6, 2017, we sold our 89.19% interest in our former subsidiary, GMD. As a result, we present GMD as a discontinued operation in our audited annual consolidated financial statements for the years ended December 31, 2017, 2018 and 2019. We have reclassified our consolidated financial information for the years ended December 31, 2015 and 2016 included in this annual report, to show GMD as a discontinued operation. In addition: (i) on December 4, 2018, we sold our 73.16% interests in each of CAM and CAM Servicios, (ii) on April 11, 2018, we sold our interest in Stracon GyM, and (iii) we are in the process of marketing for sale our subsidiary Adexus. As a result, we present CAM, CAM Servicios and Stracon GyM as discontinued operations, and Adexus as an investment held for sale, in our audited annual consolidated financial statements for the years ended December 31, 2018 and 2019. We have reclassified our consolidated financial information for the year ended December 31, 2017, and the selected financial information for the years ended December 31, 2015 and 2016 included in this annual report, to show CAM, CAM Servicios and Stracon GyM as discontinued operations as Adexus as an investment held for sale.

111

Internal Control over Financial Reporting

In 2019, we identified material weaknesses regarding our internal control over financial reporting. For more information, see “Item 3. Key Information—D. Risk Factors—We have identified material weaknesses in our internal control over financial reporting, and if we cannot maintain effective internal control or provide reliable financial and other information in the future, investors may lose confidence in the reliability of our consolidated financial statements, which could result in a decrease in the value of our ADSs” and “Item 15. Controls and Procedures.”

Factors Affecting Our Results of Operations

General

Peruvian, Chilean and Colombian Economic Conditions

72.0%, 86.1% and 84.6% of our revenues in 2017, 2018 and 2019 were derived from activities in Peru. Accordingly, our results of operations are substantially affected by economic conditions in the country and our growth is driven in significant part by growth in the Peruvian economy. In addition, 17.3%, 5.8% and 9.5% of our revenues in 2017, 2018 and 2019 were derived from activities in Chile and 4.7%, 8.1% and 5.9% of our revenues in 2017, 2018 and 2019 were derived from activities in Colombia.

The Peruvian real GDP has grown at an average rate of 3.0% during the three years from 2017 to 2019. With increasing disposable income and an expanding middle class, private consumption grew at an average annual rate of 3.1% in real terms from 2017 to 2019. In 2017, 2018 and 2019 private investment increased 0.1%, 2.1% and 0.9%, respectively, in real terms. Inflation in Peru, as measured by the change in the consumer price index, was 1.4% in 2017, 2.2% in 2018 and 1.9% in 2019. The sol appreciated versus the U.S. dollar by 3.3% in 2017, depreciated by 4.0% in 2018 and 1.8% in 2019. Peru’s sovereign debt has been rated investment grade by S&P, Fitch and Moody’s. At the end of 2019, Peruvian sovereign debt had one of the highest credit ratings in the South American region, rated BBB+ by S&P (August 2013) and Fitch (September 2019) and A3 by Moody’s (June 2019).

The Chilean economy grew at an average annual rate of 2.2% during the three years from 2017 to 2019 in real terms. Total fixed investment increased at an annual average rate of 3.3% in real terms during the three years from 2017 to 2019. Inflation in Chile, as measured by the change in the consumer price index, was 2.3% in 2017, 2.6% in 2018 and 3.0% in 2019. The Chilean peso appreciated versus the U.S. dollar by 7.8% in 2017 and depreciated by 12.8% in 2018 and 5.5% in 2019. Chilean sovereign debt has the highest rating in the South America region, rated A+ by S&P (July 2017), A1 by Moody’s (July 2018) and A by Fitch (March 2020).

The Colombian real GDP grew at an average annual rate of 2.4% during the three years from 2017 to 2019. Inflation in Colombia was 4.1% in 2017, 3.1% in 2018 and 3.8% in 2019. The Colombian peso appreciated against the U.S. dollar by 0.6% in 2017 and depreciated by 7.5% in 2018 and 0.8% in 2019. Colombia’s sovereign debt was rated BBB by Fitch (April 2020), BBB- by S&P (March 2020), and Baa2 by Moody’s (May 2019).

From 2015 to 2019 our revenues declined at a compound annual growth rate (CAGR) of 4.1%, excluding acquisitions and asset sales. Our organic revenues increased 6.7% in 2019 from 2018, principally as a result of higher activity levels in our E&C segment in 2019.

Fluctuations in Exchanges Rates

We estimate that in 2019, 52%, 35% and 13% of our revenues were denominated in soles, U.S. dollars and other currencies respectively, while 64%, 15% and 21% of our cost of sales during the year were denominated in soles, U.S. dollars and other currencies. In addition, as of December 31, 2019, 70%, 27% and 3% of our total debt was denominated in soles, U.S. dollars and other currencies, respectively. Accordingly, fluctuations in the value of these currencies can materially affect our results of operations. When the sol appreciates against the U.S. dollar, our operating margins tend to decrease; when the sol depreciates against the U.S. dollar, our operating margins tend to increase (if everything else were held equal). Conversely, the appreciation of the sol against the U.S. dollar tends to

112

decrease our indebtedness and financial expenses as expressed in soles; and the depreciation of the sol against the U.S. dollar tends to increase our indebtedness and financial expenses as expressed in soles. We enter into derivatives, from time to time, to hedge part of our financial exposure to currency fluctuations. Although value of the sol to the U.S. dollar appreciated in 2017, it depreciated in 2018 and 2019, which impacted our results of operations.

We have included estimates of the approximate effects of fluctuations in exchange rates on our consolidated and segment revenues and costs of sales in “—Results of Operations.” These estimates were calculated based on daily average exchange rates and estimated aggregate revenues and cost of sales denominated in U.S. dollars, Chilean pesos and Colombian pesos, and were not calculated on a transaction by transaction basis. For additional information on the effect of exchange rate fluctuations on our results of operations, see “Item 11. Quantitative and Qualitative Disclosures about Market Risk—Exchange Rate Risk.”

Cost of Labor, Third-Party Services and Inputs

The largest components of our costs are: labor, which represented 27.7% of our cost of sales and 54.9% of our administrative expenses in 2019; services provided by third parties, which represented 39.1% of our cost of sales and 27.5% of our administrative expenses in 2019; and inputs (including raw materials), which represented 22.2% of our cost of sales in 2019. For a breakdown of our cost of sales and administrative expenses, see note 26 to our audited annual consolidated financial statements included in this annual report.

Our cost of labor is influenced by, among other factors, the number of our employees, as well as inflation, competition we face for personnel in each of our business segments and the availability of qualified candidates. From 2017 to 2018 our personnel charges decreased by 15.2%, and from 2018 to 2019 our personnel charges increased by 15.8%. Services provided by third parties include: subcontracting in our E&C segment, such as carpentry work; advisory and consultancy work, including external audit and legal services; and renting of equipment. From 2017 to 2018 our costs related to services provided by third parties decreased by 15.4% and from 2018 to 2019 our costs related to services provided by third parties increased by 29.8%. The principal inputs we use are fuel, cement and steel, which in the aggregate represented 18.9% of our total input costs in 2019. Our costs for these inputs are affected by, among other factors, the growth or decline of our operations, market prices, including global prices in the case of fuel, and transportation costs. We do not have long-term contracts for the supply of our key inputs. From 2017 to 2018, our input costs decreased by 40%, and from 2018 to 2019, our input costs increased by 13.3%. Our cost of labor, third party services and inputs increased in 2019 primarily due to higher activity levels in our E&C segment.

Acquisitions and Dispositions

In September 2015, we acquired a 20% participation in the shareholder’s equity of Gasoducto Sur Peruano, the concessionaire of the southern gas pipeline project for a total of US$215 million (S/722 million). In addition, our subsidiary GyM participated with a 29% stake in the construction consortium for this project (Consorcio Ductos del Sur), which represented approximately US$1.0 billion of our backlog as of December 31, 2015. The GSP gas pipeline concession was terminated on January 24, 2017, and as a result, we recognized impairments with respect to our investment in GSP and account receivables owed to us from GSP in 2016 and 2019. For more information, see “ —Recent Developments (2017 – 2020) — Termination of the Gasoducto Sur Peruano Concession.”

In order to make payments on our debt related to the GSP project and strengthen our liquidity and financial flexibility, we sold several assets between 2017 and 2018. For a detailed description of the sale of these assets, see “—Recent Developments (2017 – 2020)— Asset Sales.”

Cyclicality

Our E&C segment is cyclical as a result of being closely linked to the conditions, performance and growth of the end-markets we serve, which include, among others, the mining, power, oil and gas, transportation, real estate and other infrastructure sectors in Peru, as well as the mining sector in Chile and, the energy sector in Colombia. These industries tend to be cyclical in nature and tend to be affected by factors such as macroeconomic conditions, climate conditions, the level of private and public investment, the availability of credit, changes in laws and regulations and political and social stability. As a result, although downturns impact our entire company, our E&C segment has

113

historically been subject to periods of very high and low demand. The mining and oil and gas sectors, in particular, are also driven by worldwide demand for the underlying commodities, including, among others, silver, gold, copper, oil and gas, which can be affected by such other factors as global economic conditions and geopolitical affairs. Furthermore, prevailing prices and expectations about future prices for minerals or oil and gas, costs of exploration, production and delivery of product and similar factors can have a significant impact on our clients’ exploration and production activities and, as a result, on their demand for our engineering and construction services.

Our Real Estate segment is also cyclical and is significantly affected by changes in general and local economic conditions, such as employment levels and job growth, availability of financing for home buyers, interest rates, foreclosure rates, inflation, consumer confidence and housing demand. In addition, in our Infrastructure segment, our Energy line of business is cyclical and affected by global supply and demand for oil.

Seasonality

Our business, on a consolidated basis, has not historically experienced seasonality. In our Infrastructure segment, we have experienced moderate seasonality at (i) Norvial, due to heightened vehicular traffic activity during the summer season in the first quarter of the year, and (ii) GMP’s gas processing plant, which typically closes for maintenance during the rainy season in the first quarter of the year, as demand for gas is lower during this time.

Engineering and Construction

The principal driver of our E&C results is economic growth in Peru, particularly private and public investment in the country’s mining, power, oil and gas, transportation, real estate and other infrastructure sectors. See —Peruvian and Chilean Economic Conditions.

Appropriate pricing and budgeting of our engineering and construction projects is also key to our results of operations in our E&C segment and can be affected by such factors as competition, direct negotiations with clients as opposed to competitive bidding processes, the accuracy of our estimation of project costs and unexpected cost overruns. The types of contracts in this segment consist of cost-plus fee, unit price, lump-sum and EPC contracts. For a description of our E&C contracts, see “Item 4.B. Information on the Company—Business Overview—Engineering and Construction—Contracts.” The nature of our contractual arrangements can affect our margins, both because, depending on the type of contract, the burden of cost overruns may be placed on the client or on us, and because certain contractual arrangements tend to have lower gross margins. For the years 2017 and 2018, our E&C segment has trended towards more contractual arrangements based on cost-plus fee EPC contracts. For the 2019 year, our E&C segment has trended towards more contractual arrangements based on unit prices. The types of contractual arrangements we enter into in our E&C segment vary significantly from period to period.

During 2017, activity levels in our E&C segment remained low as a result of the cancellation of the GSP and Chavimochic projects, and also due to the ending of the bioenergy Zona Franca project in Colombia. The activity levels in 2017 in the E&C segment were affected by political and other issues.

During 2018, activity levels in our E&C segment decreased as a result of the divestment plan executed by our company. In April 2018, our subsidiary GyM sold its 87.59% interest in Stracon GyM, our subsidiary that engaged contracts mining services in Perú. We also experienced lower activity levels in our business units engaged in electromechanical and civil works.

During 2019, activity levels in our E&C segment increased as a result of the execution of construction contracts in the mining and oil and gas sectors, primarily in Peru. We also experienced higher activity levels in our building and infrastructure units.

114

Infrastructure

Traffic and Fees for Toll Roads

The majority of our toll roads revenues derive from the Norvial concession. Unlike our other toll road concessions, our revenues from the Norvial concession depend on traffic volume. Traffic volume on the Norvial road increased 6.3% from 2017 to 2018 and 1.8% from 2018 to 2019 (based on vehicle equivalents, as defined in “Item 4.B. Information on the Company—Business Overview—Infrastructure—Principal Infrastructure Activities—Toll Roads—Norvial”). For the Norvial toll road, the toll rate is set out in the Norvial concession agreement and adjusted in accordance with a contractual formula that takes into account the sol/U.S. dollar exchange rate and Peruvian and United States inflation. Under our Survial and Canchaque road concessions, our revenues consist of annual fees paid by the Peruvian Ministry of Transport and Communications in consideration for the operation and maintenance of the roads, which can vary depending on the amount of road maintenance required due to road wear and tear.

Under the Norvial concession, we are required to expand certain stretches of the highway by, among other things, adding two additional lanes. The first stage of construction was completed in 2008 and the second stage was completed in December 2019. Norvial’s capital investment for the second stage was approximately US$95 million (S/319.2 million). In June 2018, we signed an investment agreement with BCI Perú to monetize future dividends of Norvial. The amount of the transaction was US$42.3 million, the proceeds of which were applied to the reduction of indebtedness related to GSP.

Mass Transit

We generate revenue from our Lima Metro concession based on kilometers travelled per train, with the fee per kilometer, the number of trains required to be in operation and the number of kilometers that we are required to travel established by the terms of the concession. Our revenues do not depend on passenger traffic volume. Our results in this concession between 2017 and 2019 were influenced by the timely acquisition, set up, reliability and proper operation of our trains. We currently have all 44 trains in operation (including three backup trains).

Energy

A part of the revenues in our Infrastructure segment depends on global prices for oil. Under our hydrocarbon extraction service contracts, we are entitled to a variable fee, which is based on the level of production of each field and a basket of international crude oil prices. Under our contracts, we acquire the extracted hydrocarbons and pay royalties, which are also based on a basket of international crude prices and the level of production. Historically, oil prices have been volatile and are likely to be volatile again in the future. During 2017, 2018 and 2019, average Brent crude prices were approximately US$53.02, US$69.69 and US$64.26 per barrel, and the average fee we received in these years was US$49.19, US$64.72 and US$63.11 per barrel of extracted oil, respectively. During the first quarter of 2020, the Brent crude price was approximately US$50.26 per barrel and our fee was approximately US$49.02 per barrel of extracted oil. Because our activities are conducted in mature oil fields, which have been producing oil for over 100 years in the case of Block I, approximately 100 years in the case of Block III, approximately 95 years in the case of Block IV and for over 50 in the case of years Block V, our oil production depends primarily on the level of our drilling and production activities.

Our Pariñas gas processing plant has a long-term delivery and gas processing and fractionation contract with Empresa Eléctrica de Piura S.A. (ENEL), a thermal power generation subsidiary of the Endesa group. Under this contract, ENEL delivers natural gas that it purchases from onshore and offshore gas producers in the Talara area. We are responsible for all operating costs of the gas processing plant but are entitled to keep revenues from the sale of all resulting natural gas liquids to third parties after delivery of all dry gas and payment of a variable royalty to ENEL. Approximately 75% of the total volume of natural gas processed by our Pariñas gas processing plant depend upon gas volumes demanded by ENEL for its gas-fired turbines, which can vary significantly. 15% of the volume of natural gas is extracted from our Block I. Prices for natural gas liquids can also fluctuate significantly and are affected by market prices for crude oil. We processed 30.57 MMcf per day during 2017, 30.12 MMcf per day during 2018 and 30.52 MMcf per day during 2019. These volumes vary per month and depend upon the power dispatch curve of ENEL among Peruvian power generation plants. In rainy months (December to April) where hydroelectric power generation in Peru is typically higher, gas volumes demanded by ENEL are lower than in dryer months (May to November) in which activity of thermal generators tends to be higher.

115

In connection with our fuel storage terminal business, under three operation contracts with Petroperú, we receive revenues related to monthly reserved volume in storage tanks for refined crude products (storage fee) and for volumes loaded and delivered into railroad cars or cistern trucks to each terminal (throughput fee). These fees are adjusted annually to account for U.S. inflation. Our fuel storage activities in the North and Central Terminals are carried out under 20-year contracts, which expire in 2034. Our contract for the operation of the South Terminal expired on November 2, 2019.

Awarding and Timing of Infrastructure Concessions and Government Contracts

The results of operations of our Infrastructure segment are affected by our ability to win new concessions and government contracts, which depend in part on government policies and our ability to compete effectively.

We are a 50% partner in Consorcio Terminales, which held a concession for the operation of the South Terminal. In November 2018, Petroperú initiated a public bidding for the operation of the South Terminal, which was cancelled by Petroperú in May 2019. There was no winner in the public bidding for the operation of the terminal, and the contract of Consorcio Terminales was extended through contract amendments, the latest of which terminated on November 2, 2019, and the concession reverted to Petroperú.

Moreover, our results in the operation and maintenance of infrastructure assets depend on our ability to obtain contracts from the government or infrastructure concessionaires, such as those in our Infrastructure segment, which depend on government policies and our ability to compete effectively. In 2017, we were awarded two new contracts (Cora Cora and C.V. Pasco, also with Provías Nacional). We typically obtain higher revenues from these contracts during the commencement of services as we bring the road to proper operating condition, and lower revenues at the end of the contract term as services wind down.

Our results in our Infrastructure segment are also affected by the timing of the commencement of operations under our concessions, as well as when we were required to undertake significant capital investments or major construction works under the terms of our concessions. Under our Norvial and Lima Metro concessions, we are required to undertake capital investments during the initial years of the concessions for which we are compensated throughout the term of the concessions by our toll rate in the case of the Norvial concession and tariffs in the case of the Lima Metro concession. Under our Survial, Canchaque and La Chira concessions, we generate revenues in our Infrastructure segment from our construction activities during the pre-operational phase, and once operations commence we generate revenues from fees related to operation and maintenance. Survial, Canchaque and La Chira have financed their construction costs through the sale of government certificates of construction to financial institutions at a discount from face value. Certificates of construction are negotiable instruments that the Peruvian government typically delivers upon completion of each stage of a project and which entitle the holder to receive payment from the government equal to the capital investment made in the corresponding stage upon completion of the entire project. Accordingly, the results of our Infrastructure segment may be affected by the discount rates obtained on the sale of government certificates of construction. For more information on our obligations and compensation under our concessions, see “Item 4.B. Information on the Company—Business Overview—Infrastructure.”

Real Estate

The results of operations of our Real Estate segment are driven by the number of units we develop and deliver in a reporting period, our mix of unit sales (affordable housing versus housing), unit prices, land purchase prices and our costs of construction. These results are also affected by a number of factors that may impact the Peruvian real estate sector as a whole, including: the availability of government subsidies for affordable housing; prices of suitable land in particular areas; regulation of real estate development imposed by national, regional and local laws and regulators, and the time required to obtain applicable construction permits and licenses; the unemployment rate and wage levels; prevailing interest rates and availability of financing; the supply in the market; the level of customer interest in our new projects; and our costs, such as the price of labor, materials, insurance, taxes and other public charges. We delivered 1,418 units, 1,276 units and 1,452 units in 2017, 2018 and 2019, respectively.

116

The results of operations of our Real Estate segment are also significantly affected by our sales of land parcels. Due to the appreciation of land prices in Peru, and because we record our land holdings at book value (i.e., without marking to market), our recent land sales have resulted in high margins. See “—Recent Developments (2017—2020) — Asset Sales.”

In addition, the net profit attributable to controlling interests of our Real Estate segment is significantly affected by the financing and commercial arrangements we use to purchase land and to develop real estate projects. Depending on the level of non-controlling interests used to finance our real estate projects, our Real Estate segment tends to have significant net profit attributable to non-controlling interests. See “—Results of Operations—General—Real Estate.”

Critical Accounting Estimates and Judgments

For information on critical accounting estimates and judgments, see note 5 to our audited annual consolidated financial statements included in this annual report.

New Accounting Pronouncements, Amendments and Interpretations

For information on new accounting pronouncements, amendments and interpretations, see note 3.1 to our audited annual consolidated financial statements included in this annual report.

Results of Operations

General

Accounting for Subsidiaries, Joint Operations, Joint Ventures and Associated Companies

Results of our subsidiaries, joint operations, joint ventures and associated companies are reflected in our financial results. We refer to our subsidiaries as those entities over which we exercise control. We consolidate the results of our subsidiaries in our financial statements and we reflect the profit corresponding to the minority interests in our subsidiaries under “profit attributable to non-controlling interests” in our income statement. Our consolidation of the results of our subsidiaries include subsidiaries in which we have less than 50% of the equity. We refer to business activities in which we share control with unrelated entities as joint arrangements, including joint operations and joint ventures, which are typically conducted through an agreement with a third party to carry out specific projects. We contribute our assets to these projects and derive revenue from their use. In our financial statements we recognize, in relation to our interest in a joint operation, our assets and liabilities, including our share of any asset or liability we hold jointly with our partner, as well as our share of revenue and expense from the joint operation. We refer to our associated companies as those entities over which we have significant influence but do not control. We reflect the results of our associated companies and joint ventures under the equity method of accounting in our financial statements under the line item “share of the profit and loss in associates” in our income statement. For further information, including a list of our subsidiaries, joint operations, joint ventures and associated companies, see notes 6a, 6c and 15 to our audited annual consolidated financial statements included in this annual report.

Intersegment Transactions

Some of our segments from time to time provide services to our other segments. In 2018 and 2019, we obtained 16.7% and 1.06%, respectively, of the revenues in our E&C segment from the construction of the expansion works of Line 1 at GyM Ferrovías, and 30% and 4.47%, respectively, of the revenues in our E&C segment from additional construction works executed for Norvial (Ancón – Pativilca Toll Road). Accordingly, in such circumstances, the segment providing services recognizes revenues and the segment receiving such services recognizes costs of sales relating to the services provided. In consolidation, these intersegment revenues and cost of sales are eliminated in our financial results. Nonetheless, our Infrastructure segment, in particular, may recognize gross profits or losses based on the difference between the fees the segment charges in accordance with concession terms and costs it incurs relating to services provided by our other segments. For more information on our segments, see note 7 to our audited annual consolidated financial statements included in this annual report.

117

Engineering and Construction

We obtain revenues in our E&C segment from the engineering and construction services we provide to our clients, which we recognize under the percentage-of-completion method of accounting. For further information, see note 2.26 to our audited annual consolidated financial statements included in this annual report. We receive unrestricted client advances in a substantial majority of our E&C projects, on average equal to approximately 20% of the contract price in 2019, which we record as an account payable. We typically invoice our clients on a periodic basis as each project progresses, deducting from the related advances on a proportional basis. For further information, see note 21 to our audited annual consolidated financial statements included in this annual report. Our cost of sales in our E&C segment includes labor, subcontractor expenses, materials, equipment, and project-specific general expenses.

Infrastructure

In our Infrastructure segment, we recognize revenues and cost of sales as follows:

(1) Toll Roads:

• For Norvial, we obtain revenues for toll fees collected, minus deductions required to be transferred to the government as described in “Item 4.B. Information on the Company—Business Overview—Infrastructure—Principal Infrastructure Activities—Toll Roads—Norvial,” which we recognize upon receipt. In June 2018, we signed an investment agreement with BCI Perú, to monetize future dividends of Norvial. The amount of the transaction was US$42.3 million, the proceeds of which were applied to the reduction of indebtedness related to GSP. Cost of sales for Norvial include fees paid to third parties (primarily our subsidiary Concar) for operation and maintenance services as well as the amortization of the road concession registered as an intangible asset in our financial statements; and

• For Survial and Canchaque, we obtain revenues for routine and periodic maintenance services, which we recognize in the period in which the services are performed. Cost of sales for Survial and Canchaque include fees paid to third parties (primarily our subsidiary Concar) for operation and maintenance services. We do not recognize the Survial and Canchaque concessions as intangible assets and therefore do not amortize the concessions.

For further information, see notes 2.26, 2.27 and 17 to our audited annual consolidated financial statements included in this annual report.

(2) Mass Transit: We obtain revenues from our Lima Metro concession based on a tariff per kilometer traveled by our trains in operation in accordance with a schedule established in our concession agreement, which we recognize in the period in which the services are performed. Under the concession, the tariff is comprised of three components: (i) fees related to our operation and maintenance services; (ii) fees related to the Peruvian government’s repayment of the amounts we invest to purchase trains, ongoing capital expenditures and other infrastructure for the Peruvian government; and (iii) fees related to interest we charge to the Peruvian government in connection with the amounts we invest to purchase such trains, ongoing capital expenditures and other infrastructure. In 2019, the fees related to items (i), (ii) and (iii) were S/289.9 million. We only recognize in our income statement the portion of the tariff that relates to items (i) and (iii). We record the amounts paid by us that relate to item (ii) as long-term accounts receivables from the Peruvian government. Accordingly, tariff payments received relating to item (ii) reduce our accounts receivables but do not impact our income statement, and we do not amortize our investments in our income statement as our investment in the concession is recorded as an account receivable with the government rather than a depreciable investment.

We entered into the fourth addendum to the Lima Metro concession contract on July 11, 2016, in order to expand transportation capacity. In accordance with the fourth addendum, the expansion project will involve: (i) the purchase of 20 new trains; (ii) the purchase of 39 new cars; and (iii) the improvement and expansion of the existing infrastructure. As compensation for the investments of the expansion project, we will be entitled to receive the following: (i) an advance payment of 30% of each investment component; and (ii) the balance of 70% of each

118

investment component, compensated through the annual payment for additional investments (pago anual por inversiones complementarias). We register the estimated compensation related to the direct cost in the income statement, plus a margin in the same period. In 2019, the income related to the investment components was S/37.8 million.

For further information, see note 11 to our audited annual consolidated financial statements included in this annual report. Cost of sales for the Lima Metro include fees paid to third parties (primarily our E&C segment, our subsidiary Concar and other subcontractors) for construction and operation and maintenance services, energy, and our financing costs related to the purchase of trains.

(3) Water Treatment: We obtained revenues from the engineering design and construction of La Chira waste water treatment plant, which we recognize based on the percentage-of-completion method of accounting. Since the plant began operating in August 2016, we obtain revenues only for operation and maintenance services, which we recognize in the period in which the services are performed.

(4) Energy: We obtain revenues from extraction services and license contracts related to oil and gas production, fuel storage services, and the sale of natural gas liquids derived from our gas processing and fractionation services, which we recognize in the period in which the services are performed and, in the case of sale of natural gas liquids, when the sale is made. Cost of sales for our energy line of business includes labor, materials, amortization of oil wells, depreciation of the gas plant, maintenance and general expenses.

(5) Operation and Maintenance of Infrastructure Assets: We obtain revenues from our operation and maintenance of infrastructure assets line of business for the operation and maintenance services we provide to the government and concessionaires (currently concessions within our Infrastructure segment), which we recognize in the period in which the services are performed. We receive unrestricted advances with respect to our service contracts with the government, that vary from approximately 10% to 30% of the contract price, which we record as an account payable. We typically invoice our clients on a periodic basis as the project progresses, deducting from the related advances on a proportional basis. For further information, see note 20 to our audited annual consolidated financial statements included in this annual report. Our cost of sales in this line of business includes personnel costs, services provided by third parties, machinery and other materials (primarily trucks), and depreciation of equipment utilized to provide services.

Real Estate

We obtain revenues in our Real Estate segment from sales of affordable housing and housing units, commercial buildings and land parcels, which we recognize at the time of delivery of the unit or building and, in the case of land parcels, at the time of the sale. We typically pre-sell our affordable housing and housing units prior to and during construction, and use the related proceeds we receive to finance the construction of the units. These pre-sale funds are restricted and released from escrow to us periodically as construction progresses. Our Real Estate cost of sales includes the cost to purchase land, costs of architectural design and construction (which usually includes payments to third parties, primarily our E&C segment), licensing and permit costs, personnel costs, and fees to third parties related to sanitation or electrical engineering. In 2019, our cost of land that is allocated to units delivered during these periods amounted to S/32 million. We recognize land purchases as inventory, and, accordingly, do not mark-to-market the value of our land for changes in fair value. For further information, see note 14 to our audited annual consolidated financial statements included in this annual report.

In our Real Estate segment, we have significant net profit attributable to non-controlling interests. We hold a significant portion of our land bank through Almonte in which we have a 50.45% interest, and we consolidate Almonte’s results in our financial statements. In addition, we undertake a significant number of our real estate projects through entities in which we may have a majority interest, co-equal interest or minority interest; when we have control over these entities, we consolidate their results in our financial statements regardless of whether we own a majority of the capital. Furthermore, in connection with our affordable housing projects, we generally partner with real estate investment funds and insurance companies that provide between 60% and 70% of the total capital required to purchase the land and cover certain pre-construction costs in exchange for equity in the project. Although we typically own a minority interest in these projects, we consolidate their results in our financial statements because we exercise control over the project. Accordingly, we reflect the profit corresponding to our real estate partners under net profit attributable to non-controlling interests in our income statement. See “—Accounting for Subsidiaries, Joint Operations, Joint Ventures and Associated Companies.”

119

Comparison of Results of Operations of 2018 and 2019

The following table sets forth the components of our consolidated income statement for 2018 and 2019.

	Year ended December 31,
	2018			2019			Variation
	(in millions of S/)
Revenues		3,899.5			4,085.0			4.8	%
Cost of sales		(3,225.0	)		(3,643.2	)		13.0	%
Gross profit		674.5			441.8			(34.5	%)
Administrative expenses		(278.4	)		(213.9	)		(23.2	%)
Other income (expenses)		(61.2	)		(324.9	)		430.9	%
Other (losses) gains, net		(0.1	)		(1.9	)		NM
Profit from sale of investments		—			—			—
Operating profit		334.8			(98.9	)		NM
Financial (expense) income, net		(197.1	)		(157.1	)		(20.3	%)
Share of profit and loss in associates		(3.7	)		(218.8	)		5,813.5	%
Profit (loss) before income tax		134.0			(474.8	)		NM
Income tax		(113.3	)		(320.0	)		182.4	%
Net profit from continuing operations		20.7			(794.8	)		NM
Profit from discontinued operations		36.8			(44.0	)		NM
Net profit (loss)		57.5			(838.8	)		NM
Net profit (loss) attributable to controlling interest		(83.2	)		(884.7	)		963.3	%
Net profit attributable to non-controlling interest		140.6			46.1			(67.2	%)

Revenues

Our total revenues increased by 4.8%, or S/185.5 million, from S/3,899.5 million for 2018 to S/4,085.0 million for 2019. Revenues increased due to an increase in the volume of projects under execution in the E&C segment. This was partially offset by: a decrease in revenues from the Infrastructure segment due to the completion of the expansion works of Line One of the Lima Metro, and a reduction of maintenance works by Concar; a decrease of revenues in the Real Estate segment as a consequence of fewer units of traditional housing delivered during the year, and the absence of land sales from the Almonte property during 2019.

The following table sets forth a breakdown of our revenues by segment for 2018 and 2019.

	Year ended December 31,
	2018						2019						Variation
	(in millions of S/)			% of Total			(in millions of S/)			% of Total			%
Engineering and Construction		1,960.9			50.3	%		2,797.3			68.5	%		43	%
Infrastructure		1,883.3			48.3	%		1,587.3			38.9	%		(16	)%
Real Estate		630.1			16.2	%		264.4			6.5	%		(58	)%
Corporate		62.1			1.6	%		87.5			2.1	%		41	%
Eliminations		(636.9	)		(16.3	)%		(651.5	)		(15.9	)%		2	%
Total		3,899.5			100.0	%		4,085.0			100	%		4.8	%

Cost of Sales

Our total cost of sales increased by 13%, or S/418.2 million, from S/3,225 million for 2018 to S/3,643.2 million for 2019. This increase is mainly due to revenue growth, plus other additional costs associated with one project in Peru in which we have an arbitration claim against the client, and cost overruns with respect to a project in Chile.

120

Gross Profit

Our gross profit decreased by 34.5%, or S/232.7 million, from S/674.5 million for 2018 to S/441.8 million for 2019. Our gross margin (i.e., gross profit as a percentage of revenues) for 2019 was 10.8%, compared to 17.3% for 2018.

The following table sets forth a breakdown of our gross profit by segment for 2018 and 2019.

	Year ended December 31,
	2018						2019						Variation
	(in millions of S/)			% of Total			(in millions of S/)			% of Total			%
Engineering and Construction		62.1			9.2	%		98.4			22.3	%		58.5	%
Infrastructure		350.6			52.0	%		324.4			73.4	%		(7.5	)%
Real Estate		288.0			42.7	%		70.8			16.0	%		(75.4	)%
Corporate		(10.6	)		(1.6	)%		(2.2	)		(0.5	)%		(79.2	)%
Eliminations		(15.6	)		(2.3	)%		(49.6	)		(11.2	)%		217.9	%
Total		674.5			100.0	%		441.8			100	%		(34.5	)%

Administrative Expenses

Our administrative expenses decreased by 23.2%, or S/64.5 million, from S/278.4 million for 2018 to S/213.9 million for 2019. This decrease is mainly due to the reduction of legal services provided by third parties, and the reduction of expenses from the sale of assets. As a percentage of revenues, our administrative expenses decreased to 5.2% in 2019, from 7.1% in 2018.

Other Income (Expenses)

Our other income (expenses) decreased by 430.9%, or S/263.7 million, from S/61.2 million in expenses for 2018 to S/324.9 million in expenses for 2019. In 2018, our other income (expenses) included a provision related to the potential civil compensation in favor of the Peruvian state that may be required to pay in connection with the investigations related to the IIRSA South project concession (tranche II) and Tranches 1 and 2 of the Lima Metro in which our company and GyM have been included as civilly-responsible third parties as described under “Item 8A. Financial Information—Consolidated Financial Statements and Other Information—Legal and Administrative Proceedings.” In 2019, our other income (expenses) included: (i) impairments with respect to our investment in GSP in the amount of S/501.7 million (US$151.3 million) with respect to our investment in GSP and our accounts receivable from GSP as a result of the termination of the GSP gas pipeline concession; (ii) an impairment of S/33.1 million (US$10.0 million) with respect to goodwill we recognized in connection with our acquisition of Morelco; (iii) a re-valuation of the Vial & Vives-DSD brand by S/10.7 million due to the increased backlog of Vial & Vives-DSD during 2019; (iv) impairments of certain minor investments of S/35.2 million (US$ 10.6 million), (v) a reversal of S/19.4 million (US$5.8 million) of the impairment of the investment in the Ancon project that was registered at the end of 2018; (vi) a provision of an additional S/77.4 million (US$23.3 million) for civil compensation in favor of the Peruvian state pursuant to Law 30737 in connection with ongoing corruption investigations in respect of the company; (vii) provisions of S/49.8 million (US$15 million) made in respect of the class action civil lawsuit against the company; and (viii) other minor adjustments of S/57.9 million (US$14.5 million).

Operating Profit

Our operating profit decreased 129.5%, or S/433.7 million, from operating profit of S/334.8 million for 2018 to operating loss of S/(98.9) million for 2019. Our operating margin (i.e., operating profit as a percentage of revenues) was (2.4)% for 2019, compared to 8.6% for 2018. The decrease in operating margin is primarily a result of the increase in Other income (expenses) explained above.

The following table sets forth a breakdown of our operating profit by segment for 2018 and 2019.

121

	Year ended December 31,
	2018						2019						2019
	(in millions of S/)			Percentage of Total			(in millions of S/)			Percentage of Total			Variation %
Engineering and Construction		(87.5	)		(26.1	)%		(33.1	)		33.5	%		(62.2	)%
Infrastructure		283.0			84.5	%		203.1			(205.4	)%		(28.2	)%
Real Estate		235.3			70.3	%		68.8			(69.6	)%		(70.8	)%
Corporate		(121.2	)		(36.2	)%		(348.3	)		352.2	%		(187.4	)
Eliminations		25.1			7.5	%		10.6			(10.7	)%		(57.8	)%
Total		334.8			100.0	%		(98.9	)		100.0	%		(129.5	)%

The following discussion analyzes our key results of operations on a segment basis. For further information on our business segments, see note 7 to our audited annual consolidated financial statements included in this annual report.

Engineering and Construction

The table below sets forth selected financial information related to our E&C segment.

	Year ended December 31,
	2018			2019			Variation
	(in millions of S/)						%
Revenues		1,960.9			2,797.3			42.7	%
Gross profit		62.1			98.4			58.5	%
Operating profit (loss)		(87.5	)		(33.1	)		62.2	%

Revenues. Our E&C revenues increased 42.7%, or S/836.4 million, from S/1,960.9 million for 2018 to S/2,797.3 million for 2019. The increase is due to the increase in the volume of projects under execution.

The following tables set forth variations in our E&C revenues by business activities, types of contracts and end-markets:

	Year ended December 31,
	2018		2019
	%		%
Engineering services		9.4		11.5	%
Electromechanic construction		22.4		29.6	%
Civil construction		52.4		48.1	%
Building construction activities		8.8		10.2	%
Other services		7.1		0.5	%
Total		100.0		100.0

	Year ended December 31,
	2018		2019
	%		%
Cost + fee		1.0		6.2	%
Unit price		41.0		46.7	%
Lump sum		38.9		9.1	%
EPC contracts		19.1		38.0	%
Total		100.0		100.0

	Year ended December 31,
	2018		2019
	%		%
Mining		23.0		43.8	%
Real estate buildings		9.1		6.3	%
Power		1.8		6.0	%
Oil and gas		40.6		32.1	%

122

	Year ended December 31,
	2018		2019
	%		%
Transportation		21.6		4.2	%
Water and sewage		1.3		0.9	%
Other end markets		2.6		6.7	%
Total		100.0		100.0

The breakdown of E&C revenues by different business activities, types of contracts and end-markets tends to vary from period to period due to a variety of factors, including the timing of the execution of larger projects in any particular period, which is typically outside of our control.

Gross Profit. Our E&C gross profit increased 58.5%, or S/36.3 million, from S/62.1 million for 2018 to S/98.4 million for 2019. Our E&C gross margin for 2019 was 3.5%, compared to 3.2% for 2018.

Other income (expenses). Other income (expenses) increased in our E&C segment, from S/13.5 million in expenses for 2018 to S/9.9 million in expenses for 2019. For 2019, this includes the sale of machinery and equipment, an impairment in respect of goodwill in Morelco and the recovery of an impairment with respect to the Vial y Vives DSD brand. See note 28 to our audited annual consolidated financial statements included in this annual report.

Operating Profit (loss). Our E&C operating profit increased S/54.4 million, from a S/87.5 million loss for 2018 to a S/33.1 million loss for 2019. Our E&C operating margin was (1.2)% for 2019, compared to (4.5)% for 2018.

Infrastructure

The table below sets forth selected financial information related to our Infrastructure segment.

	Year ended December 31,
	2018		2019		Variation
	(in millions of S/)				%
Revenues		1,883.3		1,587.3		(15.7	)%
Gross profit		350.6		324.4		(7.5	)%
Operating profit		283.0		203.1		(28.2	)%

Revenues. The table below sets forth the breakdown of our Infrastructure revenues by principal lines of business.

	Year ended December 31,
	2018		2019		Variation
	(in millions of S/)				%
Toll Roads		280.8		326.3		16.2	%
Mass Transit		586.3		397.9		(32.1	)%
Water Treatment		3.3		3.6		9.1	%
Energy		560.5		552.6		(1.4	)%
Operation and Maintenance of Infrastructure Assets		452.3		307.0		(32.1	)%
Total		1,883.3		1,587.3		(15.7	)%

Our Infrastructure revenues decreased 15.7%, or S/296.0 million, from S/1,883.3 million for 2018 to S/1,587.3 million for 2019. The variation in our Infrastructure revenues principally reflected the following:

• Toll Roads: a 16.2%, or S/45.5 million, increase in revenues, from S/280.8 million for 2018 to S/326.3 million for 2019, primarily due to the expansion works completed in 2019 and increased amounts of traffic, partially offset by fewer maintenance works effected in other roads;

• Mass Transit: a 32.1%, or S/188.4 million, decrease in revenues, from S/586.3 million for 2018 to S/397.9 million for 2019, primarily due to the completion of construction works of infrastructure expansion (which primarily impacted our results during 2018), partially offset by additional kilometers travelled by the new trains under operation;

123

• Energy: a 1.4%, or S/7.9 million, decrease in revenues, from S/560.5 million for 2018 to S/552.6 for 2019, primarily due to the decrease in the price of oil from US$69.29 in 2018 to US$63.11 in 2019 and the results in our fuel terminals business (3.57 MM barrels in storage per month in 2019 versus 3.9 MM barrels in storage per month in 2018, and 3.01 MM barrels dispatched per month in 2019 versus 3.35 MM barrels dispatched per month in 2018), partially offset by an increase in our barrel daily production 4,064 barrel daily production in 2019 versus 3,651 barrel daily production in 2018. Additionally, gas processing levels in our gas processing plant were slightly higher at (30.52 MMcf per day in 2019 versus 30.12 MMcf per day in 2018), and the prices of liquefied petroleum gas (“LPG”) decreased from US$59.36 in 2018 to US$47.86 in 2019. The price of HAS (CGN) increased from US$59.36 in 2018 to US$69.55 in 2019;

• Operation and Maintenance of Infrastructure Assets: a 32.1%, or S/145.3 million, decrease in revenues, from S/452.3 million for 2018 to S/307 million for 2019, due to fewer maintenance works during 2019 as a result of the fulfillment of periodic maintenance of Chuquibambilla and Chinchaypujio roads in 2018; and

• Water Treatment: a 9.1%, or S/0.30 million, increase in revenues, from S/3.3 million for 2018 to S/3.6 for 2019, primarily due to the larger volume of treated wastewater during 2019 compared to 2018.

Gross Profit. The table below sets forth the breakdown of our Infrastructure gross profit by principal lines of business.

	Year ended December 31,
	2018		2019		Variation
	(in millions of S/)				%
Toll Roads		70.5		58.7		(16.7	)%
Mass Transit		122.6		119.5		(2.5	)%
Energy		120.4		108.3		(10.0	)%
Operation and Maintenance of Infrastructure Assets		36.6		37.5		2.5	%
Water Treatment		0.6		0.5		(16.7	)%
Total		350.6		324.4		(7.5	)%

Our Infrastructure gross profit decreased 7.5%, or S/26.2 million, from S/350.6 million for 2018 to S/324.4 million for 2019. Our Infrastructure gross margin was 18.6% for 2018 and 20.4% for 2019. The variation in our Infrastructure gross profit principally reflected the following:

• Toll Roads: a 16.7%, or S/11.8 million, decrease in gross profit, from S/70.5 million for 2018 to S/58.7 million for 2019. Our toll roads gross margin decreased from 25.1% for 2018 to 18% for 2019, as a consequence of lower execution of periodic maintenance works;

• Mass Transit: a 2.5%, or S/3.1 million, decrease in gross profit, from S/122.6 million for 2018 to S/119.5 million for 2019, primarily due to the completion of expansion works. Our gross margin in 2019 was 30.0%, compared to 20.9% in 2018.

• Energy: a 10.0%, or S/12.1 million, decrease in gross profit, from S/120.4 million for 2018 to S/108.3 million for 2019, primarily due to the decrease in the price of oil from US$69.29 in 2018 to US$63.11 in 2019, and the price of LPG from US$52.98 in 2018 to US$41.06 in 2019. Our energy gross margin was 19.6% for 2019, compared to 21.5% for 2018;

• Operation and Maintenance of Infrastructure Assets: a 2.5%, or S/0.9 million, increase in gross profit, from S/36.6 million for 2018 to S/37.5 for 2019, due to efficiencies implemented in Line One of the Lima Metro. Our operation and maintenance of infrastructure assets gross margin was 12.2% for 2019, compared to 8.1% for 2018; and

124

• Water Treatment: a 16.7%, or S/0.1 million, decrease in gross profit for 2019, from a S/0.6 million gross profit for 2018 to a S/0.5 gross profit for 2019, due to the replacement of minor equipment for the operation of our water treatment plant. Our water treatment gross margin was 13.9% for 2019, compared to 18.2% for 2018.

Operating Profit. The table below sets forth the breakdown of our Infrastructure operating profit by principal lines of business.

	Year ended December 31,
	2018		2019			Variation
	(in millions of S/)					%
Toll Roads		59.4		30.7			(48.3	)%
Mass Transit		110.6		98.8			(10.7	)%
Energy		100.7		84.7			(15.9	)%
Operation and Maintenance of Infrastructure Assets		12.1		(11.2	)		(192.6	)%
Water Treatment		0.3		0.1			(66.7	)%
Total		283.0		203.1			(28.2	)%

Our Infrastructure operating profit decreased 28.2%, or S/79.9 million, from S/283.0 million for 2018 to S/203.1 million for 2019. Our Infrastructure operating margin was 12.8% for 2019, compared to 15.0% for 2018. The variation in our Infrastructure operating profit principally reflected the following:

• Toll Roads: a 48.3%, or S/28.7 million, decrease in operating profit, from S/59.4 million for 2018 to S/30.7 million for 2019, primarily due to the lower execution of periodic maintenance works and the impairment of our investment in the Vía Expresa Sur concession. Our toll roads operating margin was 9.4% for 2019, compared to 21.2% for 2018;

• Mass Transit: a 10.7%, or S/11.8 million, decrease in operating profit, from an operating profit of S/110.6 million for 2018 to an operating profit of S/98.8 million for 2019, primarily due to the decrease in gross profit and the increase in administrative expenses as a consequence of an increase in services provided by third parties, expenses associated with an extension of train service hours, and an administrative penalty due to a failure in the electric system of our trains in 2019. Our mass transit operating margin for 2019 was 14.8%, compared to 20.7% in 2018;

• Energy: a 15.9%, or S/16.0 million, decrease in operating profit, from S/100.7 million for 2018 to S/84.7 million for 2019, primarily due to an increase in administrative expenses as a consequence of an increase in services provided by third parties related to IT, accounting and tax consultancy. Our energy operating margin was 15.3% for 2019, compared to 18.0% for 2018;

• Operation and Maintenance of Infrastructure Assets: a 192.6%, or S/23.3 million, decrease in operating profit, from a S/12.1 million profit for 2018 to a S/11.2 million loss for 2019, primarily due to the provision in 2019 for civil compensation in favor of the Peruvian state under Law 30737 in connection with the “construction club” investigation. See “Item 5.A.—Recent Developments (2017-2020)—Emergency Decree and Subsequent Legislation” and “Item 8A. Financial Information—Consolidated Financial Statements and Other Information—Legal and Administrative Proceedings”. Our Operation and Maintenance of Infrastructure Assets operating margin was (3.6%) for 2019, compared to 2.7% for 2018; and

• Water Treatment: a 66.7%, or S/0.2 million, decrease in operating profit, from an operating profit of S/0.3 in 2018 to an operating profit of S/0.1 in 2019, mainly due to the decrease in gross profit and the increase of administrative expenses in 2019, as a consequence of extraordinary expenses for studies made for a potential expansion of the water treatment plant. Our water treatment operating margin for 2019 was 2.8%, compared to 9.1% for 2018.

125

Real Estate

The table below sets forth selected financial information related to our Real Estate segment.

	Year ended December 31,
	2018		2019		Variation
	(in millions of S/)				%
Revenues		630.1		264.4		(58.0	)%
Gross profit		288.0		70.8		(75.4	)%
Operating profit		235.3		68.8		(70.8	)%

Revenues. Our Real Estate revenues decreased 58.0%, or S/365.7 million, from S/630.1 million for 2018 to S/264.4 million for 2019. The decrease is primarily due to the sale in 2018 of land of our subsidiary Almonte, which resulted in reduced our sales from S/311 million in 2018 to S/35 million in 2019. On the other hand, there were more units delivered in 2019 (1,450 units in 2019, compared to 1,278 units in 2018).

Gross Profit. Our Real Estate gross profit decreased 75.4%, or S/217.2 million, from S/288.0 million for 2018 to S/70.8 million for 2019, mainly as a result of the sale of land by Almonte in 2018. Our Real Estate gross margin was 26.8% for 2019, compared to 45.7% for 2018.

Operating Profit. Our Real Estate operating profit decreased 70.8%, or S/166.5 million, from S/235.3 million for 2018 to S/68.8 for 2019, primarily due to the sale of land by Almonte in 2018.

Financial (Expense) Income, Net

Our net financial expense decreased 79.7%, or S/40.0 million, from net financial expenses of S/197.1 million in 2018 to net financial expenses of S/157.1 in 2019. Excluding foreign exchange differences, our net financial expense decreased 28.4%, or S/49.2 million, from net financial expense of S/173.8 million for 2018 to net financial expense of S/124.5 million for 2019, mainly due to the repayment of the debt associated to GSP project and the working capital debt of the expansion works of Line One of the Lima Metro. Our net exchange difference increased S/9.3 million, from a loss of S/23.3 million for 2018 to a loss of S/32.6 for 2019. This increase in losses is due to appreciation of the sol and the composition of assets and liabilities in dollars.

Share of Profit and Loss in Associates

Our share of profit and loss in associates decreased S/215.1 million, from a loss of S/3.7 million in 2018 to a loss of S/218.8 million in 2019, primarily due to the impairment of our investment in GSP.

Income Tax

Our income tax increased S/206.7 million, from S/113.3 million for 2018 to S/320.0 million for 2019. This increase in income tax was primarily due to a write-off of the deferred income tax asset associated with our investment in GSP. Our effective tax rates for 2018 and 2019 were 84.6% and 67.4%, respectively. See note 29 to our audited annual consolidated financial statements included in this annual report.

Net Profit

Our net profit decreased S/896.3 million, from a S/57.5 million profit in 2018 to a S/838.8 million loss for 2019. Net profit attributable to controlling interests decreased, while net profit attributable to non-controlling interests decreased S/ 94.5 million. Net profit attributable to controlling interests decreased primarily due to the impairment of our investment in GSP and the discount applied to GSP’s account receivable in respect of the termination of the GSP gas pipeline concession and an additional provision made in respect of the class action civil lawsuit against the company.

126

Comparison of Results of Operations of 2017 and 2018

For information regarding the results of operations for the years ended December 31, 2017 and December 31, 2018, See “Item 5.A. Operating and Financial Review and Prospects—Operating Results——Results of Operations Comparison of Results of Operations of 2017 and 2018” in our company’s annual report on Form 20-F for the fiscal year ended December 31, 2018.

B. Liquidity and Capital Resources

Our principal sources of liquidity have historically been cash flows from operating activities and, to a lesser extent, equity capitalization and indebtedness. Our principal uses of cash (other than in connection with our operating activities) have historically been capital expenditures in all our business segments, including acquisitions and investments in our infrastructure concessions, servicing of our debt, and payment of dividends.

We face significant liquidity constraints as a result of the COVID-19 pandemic. Since mid-March of 2020, substantially all of our engineering and construction and real estate projects have been mandatorily shut down, and we cannot assure you when we will be able to resume work on these projects. Our infrastructure operations, which have for the most part been declared essential businesses, have continued; however, certain of our infrastructure businesses have been adversely affected by the sharp decline in traffic volumes and oil and gas prices (also due to the dispute in March among OPEC member countries).

At December 31, 2019, our cash and cash equivalents totaled S/949.0 million (US$286.1 million), and at March 31, 2020, our cash and cash equivalents totaled approximately S/973.3 million (US$282.8 million), of which S/531.7 (US$154.5 million) constitutes reserved funds, which funds are held in trusts for purposes of the group’s engineering and construction, real estate and infrastructure projects and certain of the group’s outstanding bonds. For more information, see note 9 to our audited annual consolidated financial statements included in this annual report.

We are evaluating several measures to reduce expenses and preserve cash in response to the ongoing COVID-19 pandemic, including the following: (i) developing a 12-week cash plan, project-by-project, to ensure that the Company will continue to meet its critical obligations during that period, which plan is monitored and updated weekly; (ii) preparing a cash plan for the remainder of the 2020 fiscal year, to identify in advance key liquidity issues that may arise; (iii) identifying and renegotiating certain of the company’s obligations with respect to its suppliers, banks and other third parties; (iv) identifying and reducing non-essential general expenses across the group; (v) reducing headcount, and temporarily reducing salaries of senior management, across the company’s three segments; and (vi) reducing capital expenditures across the company’s subsidiaries.

As part of our strategy, we are exploring additional financing alternatives and evaluating potential asset sales. However, we cannot assure you that we will be able to obtain financing or sell assets on favorable terms or at all. If we are not able to postpone our payments to banks, to obtain additional financing, or to sell additional assets, the company’s financial condition could be materially adversely affected.

As a result of the termination of the GSP gas pipeline concession in January 2017, we renegotiated three debt instruments as follows: (i) we amended the terms of our syndicated loan related to our equity investment in GSP; (ii) we repaid our proportional guarantee of the GSP bridge loan and entered a new term loan; and (iii) we amended the terms of our proportional repayment obligations under the GSP performance guarantee. In order to strengthen our liquidity and financial flexibility, our board approved the sale of non-strategic assets. These instruments have been repaid in full. See “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Recent Developments—Debt Related to GSP.”

On November 6, 2018, our company’s general meeting of shareholders and board of directors approved an offering and sale of our company’s common shares in a private placement. Accordingly, in December 2018, our company issued and sold a total of 69,380,402 common shares to certain of our company’s existing shareholders that exercised preemptive rights in accordance with Peruvian law and a private placement. Additionally, on April 2, 2019, our company issued and sold 142,483,633 common shares pursuant to the private placement, of which: (i) 55,291,877 shares were paid in full and (ii) 87,191,786 shares were paid 50% at the time, with 50% paid subsequently on July 1, 2019. In total, our company issued and sold 211,864,065 common shares, with the proceeds amounting to US$130 million to use to reduce debt, to pay our vendors and for working capital of one of our company’s subsidiaries.

127

We have outstanding credit with various financial institutions for a total amount of US$684.3 million as of December 31, 2019 to secure performance under our contractual agreements. However, our banks have currently restricted us from taking out further lines of credit to finance new operations, due to the financial circumstances of the company and overall limitations on credit availability in Peru.

The company may face additional liquidity constraints if the Company is required to pay civil or criminal penalties, or any settlement amounts, arising from current or future investigations or civil lawsuits facing the company, depending on the timing of those required payments.

Cash Flows

The table below sets forth certain components of our cash flows for 2017, 2018 and 2019.

	Year ended December 31,
	2017			2018			2019
	(in millions of S/)
Net cash provided by (used in) operating activities		491.2			279.3			592.2
Net cash provided by (used in) investing activities		348.9			137.9			(130.8	)
Net cash provided by (used in) financing activities		(786.1	)		(300	)		(293.1	)
Net increase (net decrease) in cash		54.0			117.1			168.3

Cash Flow from Operating Activities

Net cash flow used in operating activities in 2019 was greater than in 2018. For 2019, this reflects the decrease in accounts receivable due to the completion of the expansion work in the Line 1 of the Metro de Lima during 2018.

Cash Flow from Investing Activities

Net cash flow provided by investing activities in 2019 was lower than in 2018. In 2019, there were no divestments, only minor sales of equipment and machinery and investments in the oil and gas business.

Cash Flow from Financing Activities

Net cash flow provided by financing activities in 2019 was similar to that of 2018. In 2019, we continued with the reduction of debt, mainly due to the cancelation of working capital debt used for the expansion work of Line One of the Lima Metro and the cancelation of the debt associated with the GSP project. In addition, we completed a capital increase during 2019.

128

Indebtedness

As of December 31, 2019, we had a total outstanding indebtedness of S/1,642.1 million (US$495.1 million) as set forth in the table below.

Segment	Type	Debt Amount								Total in millions of S/		Total in millions of US$		Weighted average interest rate			Range of Maturity Dates
		(in millions of US$)		(in millions of S/)		(in millions of CLP)(1)		(in millions of COP)									Minimum		Maximum
E&C	Leasing		1.9		—		606.6		222.2		9.1		2.7		5.0	%		15/03/2020		3/04/2023
	Promissory Note		15.1		141.6		—		5,569.0		197.2		59.5		7.9	%		31/01/2020		15/02/2023
Infrastructure	Leasing		0.3		1.3		—		—		2.2		0.7		5.9	%		1/01/2020		1/03/2022
	Long term loan		39.9		924.0		—		—		1,056.4		318.5		5.9	%		23/07/2020		25/11/2039
	Promissory Note		0.5		—		—		—		1.7		0.5		4.5	%		20/02/2020		20/02/2020
Real Estate	Leasing		0.6		9.6		—		—		11.7		3.5		8.1	%		1/09/2020		2/01/2023
	Promissory Note		—		110.3		—		—		110.3		33.3		7.4	%		1/01/2020		31/08/2020
Corporate	Long term loan(2)		76.7		—		—		—		254.3		76.7		10.8	%		31/07/2022		14/01/2028
Total			134.9		1,186.8		606.6		5,791.2		1,642.9		495.3

(1) Includes debt held by Vial y Vives—DSD that is denominated in Chilean pesos.

(2) Does not include our payable to Chubb Insurance Company related to our proportional repayment obligation under the GSP performance guarantee, which was repaid in full on December 6, 2018.

As of March 31, 2020, S/119.6 million (US$36.0 million) of our total indebtedness indicated in the table above has matured or been prepaid, of which S/26.2 million (US$7.9 million) was repaid and S/87.8 million (US$26.5 million) was renewed by extending the maturities. The weighted average interest rate of this renewed indebtedness and additional indebtedness is 7.03%, and the maturity dates range from January 1, 2020 to November 25, 2039.

Set forth below is a description of our material outstanding indebtedness as of December 31, 2019.

Leasing. As of December 31, 2019, we were party to numerous leasing agreements with several financial institutions which in the aggregate amounted to approximately S/23.0 (US$6.9 million). We entered into such agreements primarily for the purpose of leasing the equipment and other assets necessary to run our operations. Upon maturity of each leasing agreement, we have the option to purchase or return the equipment or assets to the lessor. The amounts owed under these leasing agreements are generally repaid in monthly installments, subject to a minimum guaranteed payment corresponding to the minimum amount for which the equipment or assets could be sold to a third-party.

Citibank, N.A. Secured Loan. Our subsidiary GMP has a secured loan with Citibank, N.A. under a loan agreement dated September 19, 2008 and amended on August 27, 2012, with an outstanding principal amount of S/8.7 million (US$2.6 million) as of December 31, 2019. This loan accrues interest at an annual rate of three month LIBOR plus: (i) 1.70% if, at the installment payment date, the exchange rate between the sol and U.S. dollar remains between S/2.60 to S/2.75 per US$1.00 or (ii) 1.95%, if otherwise. The loan matures in August 2020. The proceeds of the loan were used by our subsidiary GMP to finance the construction, equipment and operation of the Gas Pariñas plant in Talara. The agreement is secured by certain land, equipment and accounts receivable of GMP. The agreement contains certain customary covenants, including restrictions on the ability of GMP to pay dividends if it is in default under the loan and the obligation by GMP to maintain the following financial covenants during the term of the agreement: (a) Leverage Ratio (as defined therein) shall not be greater than 1.50; (b) Debt Service Coverage Ratio (as defined therein) shall not be less than 1.20; (c) Liquidity Ratio (as defined therein) shall not be less than 1.10; and (d) Debt Coverage Ratio (as defined therein) shall not be greater than 2.20.

Norvial Corporate Bonds. In July 2015, Norvial established its first corporate bond program on the Lima Stock Exchange, for a total amount of S/365 million (US$106.9 million). The first tranche under this program was issued for an amount of S/80 million, due 2020 with an annual interest rate of 6.75%. The second tranche was issued for an amount of S/285 million, due 2027 with an annual interest rate of 8.375%, structured in three disbursements. In July 2015 we received the first disbursement for S/105 million, in January 2016 we received the second disbursement for S/100 million and in July 2016 we received the third disbursement of S/80 million. These bonds are secured by: (i) certain cash flows; (ii) a mortgage on the Norvial concession; (iii) a lien over Norvial shares; (iv) the assignment of Norvial’s rights over a performance bond provided by GMP; and (v) any additional guarantees granted in favor of other secured creditors. The proceeds of these bonds were used to pay S/85 million of debt outstanding under a short-term loan agreement with Banco de Crédito del Perú (BCP) for a total S/150 million, and the rest was used to finance the construction of the second stage of Ancon – Huacho Pativilca highway and the value added tax linked to the implementation of the project expenses. As of December 31, 2019, Norvial had S/306 million (US$92 million) outstanding under these bonds.

129

Senior Secured Notes. On February 2015, GyM Ferrovías issued a total of S/629 million (US$184.3 million) Series A Senior Secured VAC-Indexed Notes due 2039, with an annual interest rate of 4.75% plus adjustments for inflation. The bonds are secured by (i) a mortgage on the Lima Metro concession, (ii) a lien on GyM Ferrovías shares, (iii) certain collection rights, (iv) certain cash flows and (v) liens on certain accounts. The proceeds from the issuance were used to repay a short term loan provide by Banco de Crédito del Perú-BCP for S/400 million, funding of the reserve accounts, payment of the issuance expenses, and for the partial repayment of a subordinated loan provided by certain shareholders of GyM Ferrovías to GyM Ferrovías. According to the indenture, in order to make any payment of a subordinated loan or distribute any dividends, our Debt Service Coverage Ratio (as defined therein) should be at least 1.2x. Under the indenture GyM Ferrovías has to fund the debt service reserve account on a quarterly basis with the equivalent of the amounts due in the next two succeeding interest payment dates. Moreover, the operation and maintenance reserve account must be funded annually with an amount equal to twenty-five percent (25%) of operation and maintenance costs of the corresponding current annual budget. As of December 31, 2019, GyM Ferrovías had S/618 million (US$186.1 million) outstanding under these notes.

Financing of the Expansion Project of the Lima Metro Concession. On August 23, 2017, GyM Ferrovías entered into a US$396 million financing structure with Mizuho Bank, Ltd and Sumitomo Mitsui Banking Corporation. The particular structure for the expansion project of the Lima Metro involved the securitization of irrevocable and unconditional payment obligations of the Government of Peru (CPAOs), which have been sold by GyM Ferrovías to a borrower under a long-term loan facility. The expansion project included the improvement of civil works and the purchase of additional rolling stock, including trains and cars that were designed, built, operated and maintained by GyM Ferrovías, as concessionaire under the Lima Metro concession. The financing was structured as a long-term loan facility and a working capital facility. We paid the final installment under this financing structure in May 2019.

BCP Loan. In December 2015, our subsidiary GMP and Oiltanking Peru S.A.C. subscribed in equal parts to a medium term loan credit agreement for up to US$100 million with Banco de Crédito del Peru, comprised of (i) a medium term tranche for up to US$70 million (for additional investments) with an annual interest rate of 6.04% and a term of five years, and (ii) a medium term tranche for up to US$30 million (for committed investments) with an annual interest rate of 6.32% and a term of eight years. The tranches of the loan mature in 2024 and 2027, respectively. The proceeds of this loan are to finance Terminales del Perú’s obligations in the operation contracts that it maintains with Petroperú in regards to the Central Terminal (corresponding to the Callao Port), and North Terminals (corresponding to the Etén, Salaverry, Chimbote and Supe Ports). As of December 31, 2019, GMP had US$37.1 million (S/123.0 million) outstanding under this loan.

Syndicated Loan. In December 2015 we entered into a medium term loan credit agreement for up to US$200 million (S/672 million) with Credit Suisse AG, Cayman Islands Branch, and Credit Suisse Securities (USA) LLC. The term of the loan is five years, with quarterly installments starting on the 18th month. The loan accrued interest at a rate of three months Libor plus 3.9% per year. The proceeds were used to finance our equity participation in GSP, which was the concessionaire of the southern gas pipeline project. We paid the final installment of this loan on June 26, 2019.

GSP Bridge Loan and New Term Loan. With the termination of the GSP gas pipeline concession, our proportional guarantee under the GSP bridge loan became due. As of December 31, 2016, there was US$129 million (S/433.4 million) of principal amount outstanding under our corporate guarantee. On June 27, 2017 we entered into a new US$78.7 million (S/264.8 million) term loan with Natixis, BBVA, SMBC and MUFJ, the proceeds of which were used to prepay GSP bridge loan. The new term loan matures on 2020, with required prepayments to be made with the proceeds of asset sales of 40% in the first year and an additional 30% in the second year of the amendment. The agreement with respect to such term loan contains a covenant restricting the Consolidated Leverage Ratio (as defined therein) from exceeding 3.5:1.0 at any time and the CAM Chile Leverage Ratio (as defined therein) from exceeding 2.5:1.0 at any time. The term loan accrues interest at LIBOR plus 4.50% per year, which will increase to 5.00% during the second year and to 5.50% during the third year. The term loan will be secured by: (i) a first lien on our rights to receive the termination payment derived from the GSP termination (the “VCN”), (ii) a second priority lien on our shares of GyM and Concar; (iii) a second priority lien on our shares of Almonte; (iv) a second priority lien on certain real estate properties in Surquillo; (v) a second priority lien on our shares of CAM; (vi) a second priority lien on our shares of CAM Servicios; and (vii) a first lien on cash flows from the sale of certain assets. We paid the final installment of this loan on June 28, 2019.

130

GSP Performance Guarantee. Upon the termination of the GSP gas pipeline concession, our proportional repayment obligations under the GSP performance guarantee from Chubb Insurance Company in the amount of US$52.5 million (S/177.4 million) became due. On December 6, 2018, we paid the final installment with respect to our obligations to Chubb Insurance Company.

Financial Stability Framework Agreement. On July 31, 2017, we, and certain of our subsidiaries, GyM, Construyendo País S.A., Vial y Vives — DSD and Concesionaria Vía Expresa Sur S.A., entered into a Financial Stability Framework Agreement (together with certain complementary contracts, the “Framework Agreement”) with the following financial entities: Scotiabank Perú S.A., Banco Internacional del Perú S.A.A., BBVA Banco Continental, Banco de Crédito del Perú, Citibank del Peru SA and Citibank N.A. The Framework Agreement aims to: (i) grant GyM a syndicated revolving line of credit for working capital for up to US$1.6 million and S/143.9 million, which may be increased by an additional US$14 million subject to certain conditions; (ii) grant GyM a line of credit of up to US$51.6 million and S/33.6 million; (iii) grant us, GyM, Construyendo País S.A., Vial y Vives – DSD and Concesionaria Vía Expresa Sur S.A. a non-revolving line of credit to finance reimbursement obligations under performance bonds; (iv) grant a syndicated line of credit in favor of us and GyM for the issuance of performance bonds up to an amount of US$100 million (which may be increased by an additional US$50 million subject to compliance with certain conditions); and (v) to commit to maintain existing standby letters of credit issued at the request of GyM and us, as well as the request of Construyendo País S.A., Vial y Vives – DSD and Concesionaria Vía Expresa Sur S.A. In April 2018, we repaid US$72.7 million of the facility with the proceeds of the sale of Stracon GyM and in July of 2018 we repaid an additional of US$ 15.4 million. As of December 31, 2019, there was US$44.2 million outstanding under this agreement.

During 2019, our construction subsidiary GyM was under a continuing default under the Financial Stability Framework Agreement with respect to its failure to comply with certain ratios between Tranche A (client invoices) and Tranche B (client provisions). No event of default was formally notified to GyM by the lenders, and GyM procured a waiver from the lenders in July 2019. As of December 31, 2019 and the date of this annual report, GyM is in compliance with the ratios set forth in the agreement.

CS Peru Infrastructure Loan. On July 31, 2019, the company entered into a medium term loan credit agreement for US$35 million (equivalent to S/112.9 million) with CS Peru Infrastructure Holdings LLC, the proceeds of which were used as working capital for the company and its subsidiaries, GyM and Adexus. The term of the loan is three years, with quarterly installments of principal beginning on the 18th month. The loan accrues interest at the following rates per annum: (i) for the period from and including the July 31, 2019 to but excluding the date that is six months after the closing date, 9.10%; (ii) for the period from and including the date that is six months after the closing date to but excluding the date that is one year after the closing date, 9.35%; (iii) for the period from and including the date that is one year after the closing date to but excluding the date that is 30 months after the closing date, 9.60%; and (iv) for the period from and including the date that is 30 months after the closing date to the third anniversary of the loan, 10.10%. On February 28, 2020, the company and the initial lender signed an amendment, waiver and consent in respect of this event of default, in consideration for a prepayment by the company of US$10 million, together with accrued interest and a make-whole premium. The principal amount outstanding under the new term loan was US$25 million (S/83 million) as of the date of this annual report.

Derivative Financial Instruments

In August 2012, our subsidiary GMP entered into two interest rate swaps with Citibank, N.A. to hedge its exposure to fluctuations in LIBOR under its unsecured loan with Citibank, N.A. described above. These interest rate swaps establish a fixed annual rate of 5.05%, payable at each interest payment date under the loan.

We did not execute any derivative financial instruments from 2013 until the date hereof, other than as described above. For additional information about our derivative financial instruments and borrowings, see notes 2.9 and 18 to our audited annual consolidated financial statements included in this annual report.

131

Capital Expenditures

The table below provides our total capital expenditures incurred in 2017, 2018 and 2019.

		2017						2018						2019
		(in millions of S/)			(in millions of US$)			(in millions of S/)			(in millions of US$)			(in millions of S/)		(in millions of US$)
E&C(1)	Capital expenditure		49.4			15.2			(40.2	)		(11.9	)		3.2		1.0
	Divestitures		(11.8	)		(3.6	)		(257.6	)		(76.2	)		—		—
	Total E&C		37.6			11.6			(297.8	)		(88.1	)		3.2		1.0
Infrastructure	Capital expenditure		122.6			37.8			131.7			39.0			179.4		54.1
	Divestitures		—			—			—			—			—		—
	Total Infrastructure		122.6			37.8			131.7			39.0			179.4		54.1
Real Estate(2)	Capital expenditure		39.7			12.2			(4.9	)		(1.5	)		5.7		1.7
	Divestitures		(36.3	)		(11.2	)		—			—			—		—
	Total Real Estate		3.4			1.0			(4.9	)		(1.5	)		5.7		1.7
Corporate	Capital expenditure		(-0.6	)		(0.2	)		2.2			0.6			-2.3		-0.7
	Divestitures		(121.7	)		(37.5	)		(12.1	)		(3.6	)		—		—
	Total Corporate		(122.3	)		(37.7	)		(10.0	)		(3.0	)		-2.3		-0.7
	TOTAL(3)(4)		41.2			12.7			(181.0	)		(53.6	)		186.0		56.1

(1) In our consolidated financial statements, in accordance with IFRS, we record in “cash flow used in investing activities” with respect to equipment leases only the amounts paid during the period as opposed to the total amount of lease payments, which is included in the table above.

(2) Includes S/1.0 million, S/8.3 million and S/0 million in investments in 2017, 2018 and 2019, respectively, for the purchase of land by our Real Estate segment, which in accordance with IFRS are recorded in our consolidated financial statements as “inventory.”

(3) In our consolidated financial statements, in accordance with IFRS, we record as “cash flow used in investing activities” with respect to equipment leases only the amounts paid during the period as opposed to the total amount of lease payments which is included in the table above.

(4) Divestitures are related to the sale of non-strategic assets, and minor divestitures are in capital expenditures.

Capital expenditures for our E&C segment of approximately S/49.9 million (US$15.2 million), S/(40.2) million (US$(11.9) million) and S/3.2 million (US$1.0 million), in 2017, 2018 and 2019, respectively, which amounts primarily correspond to the purchase and sale of equipment and machinery. In 2017, capital investments in the E&C segment only included the purchase and sale of equipment and machinery. In 2018, capital investments in the E&C segment only included the sale of equipment. In 2019, capital investments in the E&C segment included minor repositions of equipment and machinery.

Capital expenditures for our Infrastructure segment of approximately S/122.6 million (US$37.8 million), S/131.7 million (US$39 million) and S/179.4 million (US$54.1 million) in 2017, 2018 and 2019, respectively, correspond to periodic maintenance and the construction of the second stage of our Norvial toll road concession and, in our Energy line of business, oil development drilling activities as well as improvements for our gas processing plant and investments in the Lima Metro. In 2017, capital expenditures for our Infrastructure segment continued with the construction and maintenance of second stage of Norvial toll road concession, and also investments incurred in drilling wells in Blocks IV. In 2018, capital expenditures for our Infrastructure segment also included the continuation of drilling wells and, to a lesser extent, the maintenance of the Lima Metro and the second stage of our Norvial toll road concession. In 2019, capital expenditures for our Infrastructure segment included the drilling of additional wells of GMP and maintenance in respect of the second stage of the Norvial toll road concession.

Capital expenditures for our Real Estate segment of approximately S/39.7 million (US$12.2 million), S/(4.9) million (US$(1.5) million) and S/5.7 million (US$1.7 million) in 2017, 2018 and 2019, respectively, primarily correspond to the purchase of the Paul Harris project in 2017, the liquidation of the Panorama project and an additional purchase for the Paul Harris project in 2018, and additional equipment and new sales booth in the Parque de Comas Project in 2019.

132

Divestitures in 2017 consisted of approximately S/169.8 million (US$52.3 million) relating to the sale of our stake in Red Eagle of Stracon GyM, the sale of our 22.5% stake held in our associate, PRINSUR, the sale of our 89.19% interest in GMD, our IT services subsidiary, and the sale of our 51% interest in COGA to our partners, Enagas and Carmen Corporation. Divestitures in 2018 consisted of S/269.7 million (US$79.8 million) relating to the sale of our interests in Stracon GyM, CAM Chile and CAM Servicios. There were no divestitures in 2019.

We have budgeted S/122.4 million (US$37.1 million) in capital expenditures for 2020. Our current plans for our E&C segment contemplate capital expenditures in 2020 of approximately S/10.2 million (US$3.1) million, mainly for reposition of equipment and machinery. Our current plans for our Infrastructure segment contemplate capital expenditures in 2020 of approximately S/112.2 million (US$34.0 million), principally for investments in oil development drilling activities and investments in the Line 1 of the Metro. Our current plans for our Real Estate segment contemplates no expenditures in 2020. Our current plans for our Corporate segment contemplates no expenditures nor divestitures in 2020. However, our capital expenditures during 2020 may change as a result of the impact of the COVID-19 pandemic.

These estimates are subject to change. We routinely evaluate acquisitions, new infrastructure concessions, land purchases and other investment or divestiture opportunities that are aligned with our strategic goals, particularly in Peru, Chile and Colombia. We cannot assure you that we will find opportunities on terms that we consider to be favorable to us, whether we will be able to take advantage of such opportunities should they arise, or the timing of and funds required by such opportunities. In addition, should we undertake any such investments, we expect to finance these opportunities with a combination of cash on hand, new borrowings and/or financial contributions from partners, depending on a variety of commercial considerations at such time. See “Part I. Forward-Looking Statements.”

C. Research and Development, Patents and Licenses, Etc.

Not applicable.

D. Trend Information

Our Main Market: Peru

The following sets forth key macroeconomic trends in our markets, Peru, Chile and Colombia. For additional information on trends in our business, see “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Factors Affecting our Results of Operations” and “Item 4.B. Business Overview—Backlog.”

Overview of the Peruvian Economy

Our results are substantially affected by economic conditions prevailing in Peru. The Peruvian economy has been one of the fastest growing economies globally during the period from 2015 to 2019. According to the Peruvian Central Bank, Peruvian real GDP grew at an average rate of 3.2% during that period, one of the highest rates in South America. The economic expansion during this period was a result of robust domestic demand, increase in investment, price stability, increase in foreign direct investment, and an improvement in public finances, among other factors.

Nominal GDP per capita has increased from S/6,172.7 in 2015 to S/7,003.0 in 2019, a 13.5% increase. Average annual inflation, measured by the change in the CPI index, was 2.6% in the period from 2015 to 2019. On the other hand, Peru’s Sol, depreciated from an average of S/3.19 per US$1.00 in 2015 to an average of S/3.34 per US$1.00 in 2019, a depreciation of 4.7%. Peru’s sovereign debt has been granted investment grade rating by S&P, Fitch and Moody’s. At the end of 2019, Peruvian sovereign debt had one of the highest credit ratings in the South American region, rated BBB+ by S&P (August 2013) and Fitch (September 2019) and A3 by Moody’s (June 2019).

133

The following table sets forth the main economic indicators of the Peruvian economy from 2015 to 2019:

	2015			2016			2017			2018			2019
Nominal GDP (US$ billions)		192.3			195.3			215.1			225.3			230.4
Nominal GDP / capita (US$)		6,172.7			6,204.5			6,756.7			6,932.3			7,003.0
Real GDP growth rates (% based on local currency GDP)		3.3	%		4.0	%		2.5	%		4.6	%		1.8	%
Private consumption growth rate		4.0	%		3.3	%		2.5	%		3.8	%		3.0
Private investment growth rate		(4.3	%)		(5.9	%)		0.1	%		2.1	%		0.9	%
Foreign direct investment growth rate		4.9	%		(17.0	%)		(1.4	%)		(8.8	%)		(37.1	%)
Public expenditure (consumption and investment) growth rate		13.7	%		(12.2	%)		9.8	%		8.4	%		1.0	%
Total private and public fixed investment growth rate(1)		(5.3	%)		(4.6	%)		0.0	%		5.4	%		(1.5	%)
Exports growth rate		4.0	%		9.5	%		8.5	%		3.6	%		1.3	%
Imports growth rate		2.4	%		(2.2	%)		4.0	%		(1.8	%)		1.8	%
Inflation (measured by change in CPI)		4.4	%		3.2	%		1.4	%		2.2	%		1.9	%
Average exchange rate (S//US$)		3.19			3.38			3.26			3.29			3.34
End of period exchange rate (S//US$)		3.41			3.36			3.25			3.38			3.32
Central Bank interest rate (end of period)		3.75	%		4.25	%		3.25	%		2.75	%		2.25	%
Population (million)(1)		31.1			31.5			31.8			32.5			32.9
Unemployment rate(1)		6.4	%		6.7	%		6.7	%		6.6	%		6.3	%
Total public debt (US$ billions)		41.8			46.7			53.6			57.9			61.5
Public debt/nominal GDP (%)		23.3	%		23.8	%		24.8	%		25.8	%		26.8	%
Net reserves (US$ billions)		61.5			61.7			63.6			60.2			68.2
Net reserves/nominal GDP (%)		32.0	%		31.6	%		29.6	%		26.7	%		29.6	%
Fiscal surplus (deficit)/ nominal GDP (%)		(2.1	%)		(2.6	%)		(3.1	%)		(2.4	%)		(1.6	%)

Source: Peruvian Central Bank, SBS, Ministry of Economy and Finance, National Statistical Institute of Peru (INEI), IMF.

(1) 2019 projected by IMF.

The following table sets forth real gross domestic product by expenditure for the years indicated.

GDP by Expenditure (% of GDP unless otherwise stated)	2015			2016			2017			2018			2019
Government consumption		12.6			12.0			11.8			13.8			14.1
Private consumption		65.5			65.5			64.8			61.6			62.2
Total fixed investment		24.6			22.6			21.1			25.4			24.2
Public sector		5.0			4.8			4.6			7.3			6.5
Private sector		19.3			17.8			16.9			18.1			17.7
Change in inventories(1)		0.3			(0.0	)		(0.5	)		(2.8	)		(2.8	)
Exports of goods and services		21.0			22.1			24.3			24.5			24.2
Imports of goods and services		23.7			22.2			22.0			22.6			21.9
Net exports		(2.7	)		(0.1	)		2.3			2.0			2.3
GDP (in billions of US$)		192.3			195.3			215.1			225.3			230.4

Source: Peruvian Central Bank

(1) Defined as the difference between the volume at the end of the period and the volume at the beginning of the period; valued at the average price over the period.

Key Industry Sectors Relating to Our Business in Peru

Construction and Infrastructure

The Peruvian construction industry nominal GDP is estimated to be US$9.59 billion and accounted for 5.8% of the country’s nominal GDP in 2019, according to the Peruvian Central Bank. Construction GDP did not grow in real terms during the five years from 2015 to 2019. The following table illustrates, from 2015 to 2019, the average real growth rate in both private investment and construction in Peru vis-à-vis the average real GDP growth rate.

134

Growth of Real Private Investment GDP and Real Construction Sector GDP vs. Real GDP

Source: Peruvian Central Bank.

Mining

Peru is a poly-metallic resources producer and exports several metals including silver, copper, zinc, gold and lead, among others. Peru is also a major contributor to global metal reserves. According to the U.S. Geological Survey of 2020, as of January 2019, Peru held 21.4% of global silver reserves, 7.6% of global zinc reserves, 10% of global copper reserves and 4.2% of global gold reserves. According to the Peruvian Central Bank, mining exports reached approximately US$2.8 billion and represented 61.7% of total Peruvian exports in 2019.

As of December 2019, the Peruvian Ministry of Energy and Mines estimates 48 mining projects at various stages of development involving an estimated investment of US$57.8 billion.

Mining Investment Projects by Level of Development

	Number of Projects		US$ billion
Under construction		7		8.999
Detailed Engineering		3		4.185
Feasibility		15		16.217
Pre-feasibility		23		28.371
Total		48		57.772

Source: Peruvian Ministry of Energy and Mines.

Oil and Gas

The oil and gas activity in Peru has decreased with a sector nominal GDP average annual growth rate of 2.9% during the five years from 2015 to 2019. Oil and gas activity includes the exploration and production, and transportation and commercialization of hydrocarbon products and derivatives.

135

According to the Peruvian Ministry of Energy and Mines, during 2019, local production of petroleum was approximately 134 Mbbl per day, 8.4% more than 2018. Peruvian gas production increased considerably since 2004, when the Camisea project, the largest gas project in Peruvian history, began operations. The Peruvian Ministry of Energy and Mines reports that during 2019, proved reserves of oil and gas amounted to 2,626 MMboe. The Peruvian government’s reserves methodology may differ materially from the one mandated by the SEC.

Hydrocarbons Proved Reserves and Production Evolution in Peru (in MMboe)

Source: Peruvian Ministry of Energy and Mines

Our Other Markets: Chile and Colombia

Chile

Overview of the Chilean Economy

Our activities in Chile span across the E&C and power services sectors. The following table sets forth the main economic indicators of the Chilean economy for the period from 2015 to 2019.

Values in nominal US$ billion unless otherwise stated	2015			2016			2017			2018			2019
Nominal GDP		244.0			250.1			276.9			298.8			282.7
Nominal GDP / capita (US$)		13,548.4			13,743.8			15,057.6			15,934.7			14,797.2
Real GDP growth rate (%)		2.2	%		1.3	%		1.5	%		4.0	%		1.1	%
Inflation (%, measured by change in CPI)		4.4	%		2.7	%		2.3	%		2.6	%		3.0	%
Total private and public fixed investment		53.6			57.8			61.8			58.7			61.2
Average exchange rate (CLP/US$)		654.2			676.8			649.3			640.29			702.63
End of period exchange rate (CLP/US$)		707.3			667.3			615.2			694.0			732.2
Population (million)(1)		18.0			18.2			18.4			18.8			19.1
Unemployment rate		5.9	%		6.2	%		6.5	%		7.1	%		7.1	%
Public Debt / nominal GDP (%)		16.0	%		21.3	%		24.9	%		25.6			27.9
Net reserves / nominal GDP (%)		15.8	%		16.2	%		14.1	%		14.5	%		15.3	%
Fiscal surplus (deficit) / nominal GDP (%)		(2.1	%)		(2.7	%)		(2.8	%)		(3.1	%)		(4.4	%)

Source: Chilean Central Bank, Chilean Government Budget Office, IMF, Global Insight

(1) 2019 projected by the IMF

136

The Chilean real GDP grew at an average annual rate of 2.0% during the five years from 2015 to 2019 in real terms. The country’s nominal GDP per capita has increased 9.2% from CLP 13,548.4 million in 2015 to CLP 14,797.2 million in 2019. This expansion was mainly driven by a strong domestic demand in real terms: total consumption grew on average at 1.6% per year during the five years from 2015 to 2019. Inflation has remained stable since 2015, averaging 3.0% between 2015 and 2019, in line with the Chilean Central Bank’s inflation target of 3% +/- 1%. Chilean sovereign debt has the highest rating in the South America region, rated A+ by S&P (July 2017), A1 by Moody’s (July 2018) and A by Fitch (March 2020).

Colombia

Overview of the Colombian Economy

Our current activities in Colombia involve technical services provided primarily to the power services sector. The following table sets forth the main economic indicators of the Colombian economy for the period from 2015 to 2019.

Values in nominal US$ billion unless otherwise stated	2015			2016			2017			2018			2019
Nominal GDP		293.3			299.4			303.5			311.1			321.5
Nominal GDP / capita (US$)		6,085.1			6,142.7			6,157.5			6,243.7			6,381.9
Real GDP growth rate (%)		3.0	%		2.1	%		1.4	%		2.5	%		3.3	%
Inflation (%, measured by change in CPI)		6.8	%		5.8	%		4.1	%		3.2	%		3.8	%
Total private and public fixed investment		60.7			66.7			66.7			64.6			67.4
Average exchange rate (COP/US$)		2,771.5			3,051.0			2,951.3			2,956.6			3,281.1
End of period exchange rate (COP/US$)		3,149.5			3,000.7			2,984.0			3,249.8			3,277.1
Population (million)(1)		48.2			48.7			49.3			49.8			50.4
Unemployment rate(1)		8.6	%		8.7	%		8.6	%		9.7	%		9.5	%
Public Debt / nominal GDP (%)		41.4	%		42.8	%		45.3	%		50.4	%		47.5	%
Net reserves / nominal GDP (%)		16.2	%		16.6	%		15.4	%		14.2	%		16.5	%
Fiscal surplus (deficit) / nominal GDP (%)		(3.1	%)		(3.9	%)		(3.3	%)		(3.1	%)		(2.5	%)

Source: Colombian National Department of Administration of Statistics (DANE), Colombian Central Bank, Colombian Treasury Department, IMF, Global Insight

(1) 2019 projected by the IMF

Colombian real GDP grew at an average annual rate of 2.5% during the five years from 2015 to 2019. The country’s nominal GDP per capita has increased 4.9% from COP 6,085.1 mm in 2015 to COP 6,381.9 mm in 2019. Inflation has increased in recent years, averaging 4.7% per year from 2015 to 2019, higher than the Colombian Central Bank’s inflation target of 3% +/- 1%. On the other hand, the Colombian peso depreciated from an average of COP 2,771.5 per US$1.00 in 2015 to an average of COP 3,277.1 per US$1.00 in 2019. Colombia’s sovereign debt currently holds BBB- by Fitch (April 2020), BBB- from S&P (March 2020), and Baa2 from Moody’s (May 2019). Colombia is also recognized for its investor-friendly legal regime.

E. Off-Balance Sheet Arrangements

As of December 31, 2019, we did not have off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

For information about performance guarantees and similar instruments that we obtained in the ordinary course of business, see note 31 to our audited annual consolidated financial statements included in this annual report.

137

F. Tabular Disclosure of Contractual Obligations

The following table sets forth our contractual obligations with payment terms as of December 31, 2019.

	Payments Due By Period (in millions of S/)
	Less than 1 year		1-2 years		3-5 years		More than 5 Years		Total
Indebtedness(1)		495,308		214,205		259,464		746,451		1,715,428
Capitalized Lease Obligations(1)		2,939		979		3,010		—		6,928
Interest(2)		60,532		26,323		47,504		229		134,588
Total(3)		558,779		241,507		309,978		746,680		1,856,944

(1) Includes principal only of our indebtedness and capitalized lease obligations.

(2) Includes the effect of our interest swap agreements described in “—Derivative Financial Instruments.”

(3) Excludes building leases, which are not material.

G. Safe Harbor

See “Part I. Forward-Looking Statements.”

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

General

Our business and affairs are managed by our board of directors in accordance with our by-laws, shareholder’s meeting rules of procedure, board of directors rules of procedure, internal rules of conduct and Peruvian Corporate Law No. 26887 (“Peruvian Corporate Law”). Our bylaws provide for a board of directors of between five and nine members. Our shareholders may appoint an alternate director for each director to act on his or her behalf when absent from meetings or unable to exercise his or her duties. Alternate directors have the same responsibilities, duties and powers of directors to the extent they are called to replace them.

Directors are elected at a shareholders’ meeting and hold office for three years. Directors may be elected to multiple terms. Our current board of directors is composed of nine directors and no alternates. If a director resigns or otherwise becomes unable to continue with the duties, a majority of our directors may appoint one of the alternate directors, or in the absence of alternate directors, any other person, to serve as director for the remaining term of the board. In the first board meeting held after the annual shareholders’ meeting where members of the board are elected, the board of directors must elect among its members a chairman and a vice chairman if the shareholders’ meeting did not elect them.

The board of directors typically meets monthly, when called by any director or our Chief Executive Officer. Resolutions must be adopted by a majority of the directors present at the meeting and the chairman is entitled to cast the deciding vote in the event of a tie.

Duties and Liabilities of Directors

Pursuant to Article 177 of Peruvian Corporate Law, directors are jointly and severally liable to the corporation, its shareholders and third parties for any damages caused by board decisions or acts that breach the law or the bylaws of the company, or for damages caused by abuse of power, fraud, willful misconduct or gross negligence.

In addition, pursuant to Article 3 of Law No. 29720, as amended, directors of companies with common shares listed on the Lima Stock Exchange are liable to the company and its shareholders for damages caused by resolutions which are favorable to their individual interest (or the interest of a related party) to the detriment of the company’s interest if: (i) the listed company is a party to the transaction; (ii) the controlling shareholder of the listed company controls the legal entity acting as counterparty; (iii) the transaction is not carried out on an arm’s length basis; and (iv) at least 10% of the listed company’s assets are involved in the transaction.

138

A director cannot be found liable for a board decision or act if they did not participate in the meeting where the corresponding decision was taken or if the director’s express disagreement is noted in the minutes of such meeting or evidenced by notarized notice.

Article 180 of the Peruvian Corporate Law requires a director to abstain from: (i) adopting decisions that would not be in the corporation’s interest and that would benefit their interests or those of any related third party, (ii) using for themselves any commercial opportunity or business they became aware of as a result of the exercise of their duties as a director and (iii) participating themselves in competition with the company in any matter that would require disclosure and abstention due to a conflict of interest. A director who violates these requirements is liable for any damages caused to the company and may be removed by a majority of the board of directors or, upon the request of any member of the board or of any shareholder, by a majority vote of the shareholders.

Pursuant to Article 181 of the Peruvian Corporate Law, shareholders are entitled to protect the interest of a company by bringing a claim of civil responsibility against any directors, subject to approval of shareholders at a duly convened shareholders’ meeting. However, Article 4 of Law No. 29,720, with respect to companies listed on the Lima Stock Exchange, establishes that a shareholder that owns at least 10% of the capital stock is entitled to file a claim of civil responsibility under Article 181 of the Peruvian Corporate Law without holding a prior shareholders’ meeting.

Additionally, Legal Decree No. 1121 and Legal Decree No. 1422 (both governing the application of Rule XVI of the Peruvian Tax Code regarding anti-evasion conduct) require the board of directors of Peruvian companies to review any tax planning strategy in respect of the prior fiscal year, and to re-authorize, amend or dissolve the same. If the board of directors do not comply with these rules, the Peruvian tax authority (SUNAT) may hold the directors jointly liable with the company.

Sections 2 and 13 of article 16 of the Peruvian Taxation Code also establish that directors will be jointly liable with the company and with each other if the company does not pay its taxes due to willful misconduct (dolo), gross negligence (culpa grave) or abuse of power of attorney in breach of anti-tax evasion laws.

Board of Directors

The following sets forth our directors and their respective positions as of the date of this annual report. The term of the current board of directors expires in March 2020, on the third anniversary from the date of election. Due to the ongoing effects of the COVID-19 pandemic and government measures to limit the spread of the virus, our annual shareholders’ meeting has been postponed and our current board of directors continue to exercise their functions until a new board is elected. Our annual shareholders meeting is expected to occur during the weeks following the date of this annual report. The company intends to nominate the current directors for re-election for a special one-year term at the annual shareholders’ meeting.

Name	Position	Year of Birth		Year of First Appointment
Augusto Baertl Montori	Chairman of the Board		1945		2017
Ernesto Balarezo Valdez	Vice Chairman of the Board (Independent)*		1967		2018
Esteban Vitón Ramirez	Director		1952		2019
Christian Laub	Director		1970		2019
Pedro Pablo Errázuriz Domínguez	Director (Independent)*		1961		2014
Roberto Abusada Salah	Director		1946		2017
Alfonso de Orbegoso Baraybar	Director (Independent)*		1962		2017
Manuel del Río Jiménez	Director (Independent)*		1952		2017
Rafael Venegas Vidaurre	Director (Independent)*		1950		2017

* Independent member under the Exchange Act independence standards.

The following sets forth selected biographical information for each of the members of our board of directors. The business address of each of our current directors is Av. Paseo de la República 4667, Surquillo, Lima 34, Peru.

139

Augusto Baertl Montori. Mr. Baertl is a mine engineer from the Universidad Nacional de Ingeniería with postgraduate programs at Harvard Business School and at Northwestern University. He has assumed important senior management positions in Peruvian and international mining and oil companies. For 30 years, Mr. Baertl held various positions in the mining company Milpo, ranging from mine superintendent, assistant manager and COO, to CEO. From 1997 to 2003, he served as president and CEO of Compañía Minera Antamina. Since 1997 he has been CEO of Agrícola Chapi S.A., and since 2003, he has been the executive president of Gestora de Negocios e Inversiones.

Mr. Baertl is the former chairman of the board of directors of the National Society of Mining, Oil and Energy at the Institute of Mining Engineers of Peru, as well as of the Latin American Business Council (CEAL) and of the Chamber of Commerce Canada- Peru. He has also been chairman of the board of Atlas Copco Peru, Downing Teal-Perú, and Petroperú. In addition, he has been member of the board of directors of different companies such as Milpo, Atacocha, Huarón, Chungar, Castrovirreyna Mining Corporation, Interbank, BISA, Graña y Montero S.A.A., Norsemont and of the Prospectors and Developers Association of Canada (PDAC). He is currently chairman of the board of Agrícola Chapi, as well as a member of the board of Alturas Minerals, Chinalco International, FIMA, Stevia One and Ligabue Catering Perú S.A.C. He is also an active member of the board of directors of the National Society of Mining, Petroleum and Energy and COMEX. He has also participated in the board of directors of various non-profit institutions.

Ernesto Balarezo Valdez. Mr. Balarezo has a Master’s Degree in Industrial Management and a Bachelor’s Degree in Industrial Engineering, both degrees obtained at the University of Texas A&M in United States. He holds post-graduate specializations in Management, Finance, Human Resources, at Institutions such as Institute of Directors (IoD), Harvard, Wharton, INSEAD, IESE, among others. He is currently working as a partner and director of Comunal Coworking. In the previous three years, he held the positions of Executive Vice President for the Americas at Gold Fields Limited, and CEO of Gold Fields La Cima S.A. He previously worked for sixteen years for the Hochschild Group. His last position was as Vice President of Operations at Hochschild Mining. He was also Chief Executive Officer of Hochschild Mining in Mexico and then in Peru, as well as Deputy Chief Executive Officer and Chief Financial Officer in Cementos Pacasmayo. He has also been Director of several companies related to the Hochschild Group and Gold Fields Ltd and Director—Founder of the Peruvian—South African Chamber. He has also contributed as Director of Peru 2021 and in IPAE Acción Empresarial.

Esteban Vitón Ramirez. Mr. Vitón was appointed as a director of the company in May 2019. He holds degrees as an economist engineer from the Universidad Nacional de Ingeniería (Peru) , a Master’s degree from ESAN Graduate School of Business (Peru), a MsM from the Arthur D Little School of Management (now Hult International Business School), has completed the advanced management program at Harvard University and has completed studies at PAD, INSEAD and others. He is the general manager and director of Pacific Energy and has been a manager of Quimpac and other local companies, as well as other companies in the region. He has been a director of Kallpa and Cerro del Águila.

Christian Laub. Mr. Laub was appointed as a director of the company in May of 2019. He holds a degree as an economist from the Universidad del Pacífico (Peru) with a specialization in business economics and an MBA from Harvard University. He has been a director of the Lima Stock Exchange, serving as its president from 2013 to 2016. He was an executive of the Credicorp Group for more than 20 years, holding different positions. Among them, he served as CEO of Credicorp Capital from 2011 to 2018. He also served as division manager of corporate banking, manager of the corporate finance area, manager of the capital markets area and general manager of Credifondo.

Pedro Pablo Errázuriz Domínguez. Mr. Errázuriz is a civil engineer from Universidad Católica de Chile, with a Master’s degree in engineering sciences from the same university and a Master’s degree in operational research (Finance) from the London School of Economics. He is currently a partner of Veta Tres and director of companies. Until March 2014, he served as Minister of Transport and Telecommunications in the Chilean administration of president Sebastián Piñera, a position he assumed in 2011. He has been a director of several companies representing the Ontario Teachers’ Pension Plan Holding and CEO of its investments’ subsidiary in Chile, AndesCan, between 2009 and 2011. At the same time, he served as chairman of the board of Biodiversa, Esval, Aguas del Valle and SAESA Group. He was CEO and president of the board of the health services company ESSBIO. He was also CEO of Lan Express between 2000 and 2006 and Vice President of corporate planning for Lan Chile between 1999 and 2000. Mr. Errázurriz has been a member of the Graña y Montero board from 2014 to date.

140

Roberto Abusada Salah. Mr. Abusada studied Economics at the Pontificia Universidad Católica del Perú and at Cornell and Harvard Universities in the USA. He holds a Bachelor’s degree in economics from Pontificia Universidad Católica del Perú as well as a Master’s degree and PhD in economics from Cornell University. He has been senior advisor to the Minister of Economy during the years of the Peruvian economic reform (1993 and 1997). In 1994 he co-founded the Peruvian Institute of Economics (IPE), which he presides over. Dr. Abusada has taught economics at the Pontificia Universidad Católica del Perú, Universidad del Pacífico (Peru), Universidad Peruana de Ciencias Aplicadas, ESAN (Peru) and Boston University. He was director of the program of graduates in economics of the Pontificia Universidad Católica del Perú and in the 1980s he held the positions of vice minister of commerce, vice minister of economy and member of the board of directors of the Central Reserve Bank of Peru. He has been director of the Corporación Andina de Fomento, as well as of Graña y Montero S.A.A. and TECSUP. He has been a member of the Global Strategic Advisory Group (GSAG) of the Konrad Adenauer Foundation. He has been a consultant to the United Nations (UNIDO, Vienna) World Bank, Inter-American Development Bank and various governments. He is currently an Ad Honorem advisor of the Peruvian government for matters of the Pacific Alliance and representative of the presidency of the council of ministers to the board of the fiscal stabilization fund and chairman of the board of GMD, director in GMP S.A. and UNACEM S.A.A. Dr. Abusada has written several books and academic articles in various economic areas and is currently writing a fortnightly opinion column at El Comercio newspaper in Lima, Peru.

Alfonso de Orbegoso Baraybar. Mr. de Orbegoso is a lawyer from Pontificia Universidad Católica del Perú. He holds a Master’s degree from Duke University School of Law and has completed specialization courses at the London School of Economics, Georgetown University and The McDonough School of Business. During 1991 and 1998 was partner of the Ludowieg, Andrade & Associates law firm and during 1998 he to 2013 he served as legal vice president and regulatory affairs at Nextel del Perú S.A. During 2014 and 2015 he served as vice president legal, regulatory and interconnection at Nextel Telecomunicações Ltda, Brazil.

Manuel del Río Jiménez. Mr. Del Río is a mechanical engineer from Pontificia Universidad Católica del Perú and holds a Master’s degree in industrial management from the Krannert Graduate School of Management — Purdue University — Indiana, USA. From July 2013 to September 2016, he was partner in tax & legal at KPMG in Peru and responsible for transactions, transfer pricing, corporate finance and business development.

During 2010 and 2013, he was the lead partner in the practice of advisory at KPMG in Peru. Previously, and since joining KPMG in 2004 until 2010, he was the managing partner of the transfer pricing division of KPMG Tax & Legal in Peru. He has more than nine years as leader of the financial control area and CFO of Citibank Perú. He was vice president of Profuturo AFP as well as member of the executive committee and director for ten years. In addition to this, he has been in charge of the professional and medical equipment business unit at Philips for eight years. Moreover, for ten years he has held various positions in the industrial and internal consulting sectors of Philips Peruana. He has taught several courses and lectures at the Pontificia Universidad Católica del Perú, as well as in private companies.

Rafael Venegas Vidaurre. Mr. Venegas is an industrial and systems engineer from Universidad Nacional de Ingeniería (Peru) and holds post-graduate specializations in administrative and finance processes at A. Andersen School in Chicago, and has completed the Management and CEO programs at the Graduate School Kellogg, as well as the strategic planning, human management and marketing program at Harvard University. He has been CEO of Banco Internacional de Colombia, Citibank Peru, BankBoston Peru, Banco Sudamericano, Hermes/Brinks and, from 2010 to 2016, of Rimac Seguros y Reaseguros.

In addition, Mr. Venegas has served as director of several institutions and companies such as Diners Peru, Profuturo AFP, Banco Financiero, Scotiabank Perú, Compass Group Peru and as chairman of the board of directors in Citileasing, Citicorp S.A.B., Clínica Internacional and Rímac EPS.

Executive Officers

Our executive officers oversee our business and are responsible for the execution of the decisions of the board of directors. Our executive officers are appointed for an indefinite period of time and their term of office may be terminated by our board of directors at its discretion. The following table presents information concerning the current executive officers of our company and their respective positions:

141

Name	Position	Year of Birth		Year of Appointment		Year of First Employment at the Company
Luis Díaz Olivero	Chief Executive Officer		1970		2017		1993
Mónica Miloslavich Hart	Chief Financial Officer		1966		2009		1993
Daniel Urbina Pérez	Chief Legal Officer		1969		2018		2018
Marlene Negreiros Bardales	Chief Human Resources Officer		1972		2019		2019
Antonio Cueto Saco	Chief Operating Officer		1966		2017		1996
Julia Sobrevilla Perea	Corporate Affairs Offer		1969		2018		2018
Julio De La Piedra Del Río	Chief Executive Officer of GyM/GMI		1953		2019		1998
Rolando Ponce Vergara	Chief Executive Officer of Viva GyM		1963		2008		1993
Reynaldo Llosa Martinto	Chief Executive Officer of GMP		1960		2014		2014
Jorge Luis Izquierdo Ramirez	Chief Executive Officer of CONCAR		1973		2019		1999
Manuel Wu Rocha	Chief Executive Concessions Officer		1977		2018		2001
Mario Gálvez Abad	Chief Executive Officer of GyM Ferrovías		1972		2018		2017
Antonio Rodríguez Canales	Chief Executive Officer of Morelco		1963		2018		1999
Alejandro Palma Jara	Chief Executive Officer of Vial y Vives-DSD		1959		2018		2018
Javier Vaca Terron	Regional Manager of Engineering and Construction		1970		2018		2008
Fernando Dyer Estrella	Chief Risk and Compliance Officer and Interim Chief Audit Executive		1962		2017		2017
Manuel Fernández Pollan	Chief Executive Officer of Qualys S.A. and Adexus/Chief of Information Technology		1958		2019		2016

Ms. Mónica Miloslavich Hart has tendered her resignation as chief financial officer of the company for personal reasons, effective June 30, 2020. Mr. Dennis Gray will serve as the interim chief financial officer of the company, as the company searches for a permanent chief financial officer. Mr. Gray currently serves as the chief financial officer of the company’s infrastructure business. In addition, Mr. Carlos Gómez Pinto has tendered his resignation as chief audit executive of the company for personal reasons, effective May 15, 2020. Mr. Fernando Dyer Estrella currently serves as the interim chief audit executive of the company, as the company searches for a permanent chief audit executive. Mr. Dyer is currently also the chief risk and compliance officer of the company.

The following sets forth selected biographical information for each of our executive officers:

Luis Francisco Díaz Olivero. Mr. Díaz joined the group in 1993, and has been our chief executive officer since March 2, 2017 and was our deputy chief executive officer from February to March 2, 2017. Before that, he served as chief operating officer since 2015, as infrastructure officer between April 2013 and December 2014, and as the chief executive officer of our subsidiary GMP between 2011 and April 2013. He holds a degree in industrial engineering, and an MBA from the University of Pittsburgh. He also served as the deputy chief executive officer of GMP from 2009 to 2011; chief financial officer of Graña y Montero from 2004 to 2009; and chief financial officer of our subsidiary GyM from 2001 to 2004. He is a member of the boards of directors of GyM, GMP and Viva GyM.

Mónica Miloslavich Hart. Mrs. Miloslavich joined the group in 1993 and has served as our chief financial officer since 2009. She holds a degree in economics from the Universidad de Lima (Peru). She worked as chief financial officer of Graña y Montero Edificaciones S.A.C. from 1998 to 2004, and as chief financial officer of our subsidiary GyM from 2004 to 2009.

Daniel Urbina Pérez. Mr. Urbina joined the group in 2018 as Chief Legal Officer. Before that, he served as general counsel for Inkia Energy since 2008, as vice president for Standard Chartered Bank between July 2005 and October 2008, as head of legal and compliance for Banco Standard Chartered between March 2000 and July 2005, as director general of the legal department for the Ministry of the Presidency between June 1999 and March 2000, as advisor to the Minister for the Advancement of Women between July 1997 and July 1998 and as associate for Benites Mercado & Ugaz between July 1993 and July 1998. He holds a law degree from the Universidad de Lima (Peru) and an LLM from Columbia University, and is authorized to practice law in Peru and New York.

Marlene Negreiros Bardales joined the group in February 2019 as Corporate Human Resources Officer. Before that, she served as Corporate Human Resources Officer in Gloria Group, and prior to that, she served as a Global Human Resources Director in AJE Group. She holds a degree in business administration from Universidad Peruana de Ciencias Aplicadas, a Human Resources Business Partner certification from Human Resources Certification Institute (HRCI), and a postgraduate certification in Human Resources from INCAE Executive Education and the McDonough School of Business from Georgetown University.

142

Antonio Cueto Saco. Mr. Cueto joined the group in 1996 and has been our chief operating officer since 2017. Previously, he was our infrastructure area officer since January 2015. He formerly served as country manager in Chile and held different management positions in the group. He holds a degree in economics from Universidad Católica del Perú and has a Master’s degree in business administration from the Pontificia Universidad del Pacífico (Peru). He also has a Master’s degree in management and finance from HEC (France). He is a director of our subsidiaries GMP, GyM Ferrovías, Norvial, La Chira, Concesionaria Vía Expresa Sur, Survial and GMI.

Julia Sobrevilla Perea. Ms. Sobrevilla joined Graña y Montero in April 2018 as Corporate Affairs Officer. She joins Graña y Montero most recently from Coca-Cola Perú, where she was Public Affairs Director from 2012 to 2018. Before joining Coca-Cola Ms. Sobrevilla was Institutional Relations Manager at Grupo ACP, a Peruvian group dedicated to microfinance in Latin America. Prior to that, from 2002 to 2010 she was Country Representative for Population Services International, a Washington, DC-based not for profit, serving in Rwanda, Mexico and Mozambique. Previously she held several positions in MTV Networks and Nickelodeon Latin America from 1994 to 2001, based in Miami, Florida. She holds a Bachelors in Linguistics and Literature from the Pontificia Universidad Católica del Perú and completed Masters Courses in Communication at Stanford University. She sits on the board of SERNANP (Servicio Nacional de Areas Naturales Protegidas), Kunan and Premio Protagonistas del Cambio UPC.

Julio de la Piedra. Mr. de la Piedra graduated as a civil engineer from the Pontificia Universidad Católica del Perú, followed by a Master’s degree (MDI) from the Universidad Politécnica de Madrid and the Pontificia Universidad Católica del Perú. He worked at GREMCO as operations manager and then as general manager for 18 years. He joined GME in 1998 as a project manager, and two years later became general manager of GML, the group’s real estate construction company. Subsequently, for 18 years, he was manager of the building division of GyM and currently serves as general manager of GyM and GMI.

Rolando Ponce Vergara. Mr. Ponce joined the group in 1993 and has served as the chief executive officer of our subsidiary Viva GyM since 2008, and as our chief real estate area officer since 2014. He holds a degree in civil engineering from Universidad Ricardo Palma (Peru). He also holds a Master’s degree in construction and real estate business management from the Pontificia Universidad Católica de Chile-Politécnica de Madrid, Spain. He previously served as manager of GyM’s real estate division. He is currently a member of the boards of directors of our subsidiaries Viva GyM and Almonte.

Reynaldo Llosa Martinto. Mr. Llosa joined the group in 2014, and has served as the chief executive officer of GMP since February 2014. He holds a degree in mechanical engineering from the University of Houston, as well as an MBA from the Universidad de Piura (Peru). He has completed several technical and executive programs, including certificate programs at Rice University and Northeastern Kellogg School of Management. He served as the chief executive officer of BPZ Energy from 2010 to 2013. Prior to that, he had worked in Schlumberger for 25 years, the last 15 of which he spent in management positions.

Jorge Luis Izquierdo Ramirez. Mr. Izquierdo joined the group in 1999 and was appointed chief human resources management officer in December 2015. Prior to that, he was our chief operational excellence officer between 2011 and 2015. In addition, from 2011 to 2013, he worked as chief officer of the Learning Center (currently known as Academia), and had previously served as project management officer. He holds a degree in civil engineering from the Pontificia Universidad Católica del Perú, and a Master’s degree in construction management from University of California, Berkeley. He is currently a director of our subsidiary Concar.

Manuel Wu Rocha. Mr. Wu is a civil engineer from the Pontificia Universidad Católica del Perú and holds a Master’s degree in business administration from the Universidad de Piura (Peru). He joined the group in 2001, and acted as chief technical officer for the oil and gas, electricity, infrastructure and sanitation areas of GyM S.A. from 2003 until 2007. He became manager of purchases and logistics of GyM S.A. in 2007, and general manager of the consortium Lima Actividades Comerciales comprised by GyM S.A. and Aguas de Barcelona from 2009 until 2011. Since 2011, he has worked as chief executive officer of GyM Ferrovías S.A. Mr. Wu is currently Chief Executive Concessions Officer.

143

Mario Gálvez Abad. Mr. Gálvez joined the group in January 2017, assuming the Deputy General Manager of our subsidiary GyM Ferrovías. He holds a bachelor’s degree in economics with complementary studies in negotiation, project evaluation and credit risk. He has more than 15 years of experience in commercial and consumer banking. He served as general manager at Aeropuertos del Perú and also held the position of Administration and Finance Manager at the same company. He is currently a director of our subsidiary GyM Ferrovías.

Antonio Rodriguez Canales. Mr. Rodríguez joined the group in 1999, and has been our chief commercial officer from 2015 to 2017. He previously served as chief investment officer, from 2010 to 2014. Before that, he was the chief executive officer of Larcomar from 1999 to 2010. He also served as director of our subsidiaries CAM and GMD and is currently a director of our subsidiary Morelco. He holds a degree in accounting from the Universidad de Lima (Peru), a Master’s in business administration from ESAN, and a Master’s degree in business administration from Birmingham Business School in the UK.

Alejandro Palma Jara. Mr. Palma joined Vial y Vives – DSD in June 2018 as Mining Commercial Manager, and was appointed as Interim General Manager in January 2019. He is a Construction Engineer (Chile) and holds a Masters’s degree in Civil Engineering in Geotechnical Engineering and Infrastructure from the University of Hannover (Germany), and has been recognized as well as a Diplom-Bau Ingenieur in Germany. He has over 34 years of national and international professional experience in construction, mining consulting and engineering. He is also a Qualified Person at the Registro Público de Personas Competentes en Recursos y Reservas Mineras of Chile. He was general manager at SRK Consulting Chile for 15 years, Board Director in Chile for 13 years, Board Director of SRK Consulting (Global) for 10 years, Board Director and Vice President of SRK Consulting (Argentina) for 7 years and Board Director of SRK Consulting (North America (USA-Canada-Mexico)) for 3 years. He was also, from July 2016 until February 2018, Vice President Mining Consulting for South America and Vice President for Ausenco Chile & Argentina. He was a key player introducing successfully in Chile the first double shield Tunneling Boring Machine TBM for the 7.9 Km long Tunnel Sur Los Bronces from Anglo American and worked as project director until the excavation was completed. He led directly the Prefeasibility Study for the 95 ktpd iron ore project Dominga (US$2.4 Billion), with more than 130,000 man-hours with a scope from mine to port (including R&R estimation), and also led most of the large projects carried out at SRK for 15 years.

Javier Vaca Terron. Mr. Vaca graduated as a Civil Engineer, Channels and Ports from the Universidad Politécnica de Madrid in 1996. He joined the Spanish company, Ferrovial Agroman, participating in the study of international works and directing the execution of projects in Madrid. In 2004, he completed an Executive MBA at IESE and joined Grupo Assignia as Director of International Production at the construction company, developing his work mainly in Latin America. In 2007, he was assigned new responsibilities within the Assignia group, as CEO of another group company, Eductrade, dedicated to foreign trade in the field of Health and Education. In 2014, he returned to the construction industry, this time directing the Business Development and Studies, Hiring and Institutional Relations Areas of the Spanish FCC. In 2016, he joined the OHL company as Southern Cone Zone Director, based in Santiago, Chile. In February 2018, he joined Graña y Montero as Regional Manager of the Engineering and Construction Area.

Fernando Dyer Estrella. Mr. Dyer is the Chief Risk and Compliance Officer of Graña y Montero, and is responsible for our company’s Corporate Risk and Compliance Program. Fernando has more than 30 years of international experience in audit, finance, internal controls, governance, ethics, compliance and management at leading multinationals. His experience includes the design, implementation, management and leading international programs on risk assessment, code of conduct, whistle blower, due diligence, anti-corruption, anti-money-laundering and international sanctions aimed to deter, detect and protect companies from crimes (focused on FCPA and UK Bribery Act). Mr. Dyer holds an MBA form Université de Genève (Switzerland), specialized in International Management, and a BA in Accounting from the Universidad del Pacífico (Peru). He is a Certified Anti-Money Laundering Specialist (CAMS) by the Association of Certified Anti-Money Laundering Specialists (USA), a Certified Corporate Compliance & Ethics Professional (CCEP) by the Society of Corporate Compliance and Ethics (USA), and an International Faculty of the International Training Compliance and International Compliance Association – ICT/ICA – (United Kingdom). Mr. Dyer speaks English, French and Spanish fluently.

144

Manuel Fernández Pollan. Mr. Fernández joined the Group in December 2015 as chief executive officer of Adexus in Chile. He also served as director the Corporate Management of Services of GyM, is the President of Adexus and a director of CAM. Mr. Fernández holds a Bachelor’s degree in Industrial Engineering from the Universidad Politécnica de Madrid, an MBA from CEPADE in Madrid and a Master’s degree in Strategic Planning and Finance from IDE in Madrid. He has worked for 10 years at Emerson Network Power, the last three years as Vice President of Sales and Regional Operations of Latin America. Before that he was chief executive officer for the Andean Countries (Colombia, Ecuador, Venezuela and Peru). Previously he worked in the Telefónica group, occupying different positions in Spain and Latin America, the last two years in Peru as chief executive officer of Telefónica Servicios Compartidos and Vice President of Resources of Telefónica del Perú. Mr. Fernandez is currently a director of our subsidiary Qualys S.A., Adexus and Chief Information Technology.

Executive Commission

The Executive Commission is currently comprised by our Chief Executive Officer, Chief Operating Officer, and the Business Segment Executive Officer for each of the three segments, our Chief Financial Officer, our Chief Legal Officer, Public Affairs Officer, our Chief Human Resources Officer, our Chief Audit Executive, our Chief Risk and Compliance Officer and Corporate Information Technology Officer. The Executive Commission evaluates, at the management level, among other matters, our strategic plan, annual budget and annual investment plan.

Business Segments Executive Commission

The Business Segments Executive Commissions are comprised by the Business Segment Executive Officer and the CEOs of the companies in each of the relevant business segments. Each Business Segment Executive Commission evaluates the applicable business segment’s annual budget, finances and operations as well as a summary of the information discussed in the Executive Commission.

Kinship

None.

B. Compensation

Compensation of Directors and Executive Officers

Director compensation must be approved by a majority of shareholders at our annual shareholders’ meeting.

In 2019, total compensation paid to our board of directors amounted to S/3.23 million, including compensation paid to directors that serve on our subsidiaries’ board of directors. In 2019, total compensation paid to our executive officers amounted to S/24.8 million. These amounts exclude a consulting agreement signed in 2018 with Augusto Baertl, Chairman of the Board of Directors. See “Item 4.B Information on the Company—Business Overview—Regulatory Matters—Labor Regulations” for additional information on profit sharing regulatory requirements and “Item 7.B Major Shareholders and Related Party Transactions—Related Party Transactions”, for a description of our consulting agreement with Mr. Baertl.

Neither we nor any of our subsidiaries have entered into any agreement that provides for any benefit or compensation to any director or senior executive upon expiration of his or her term or termination of employment. Under Peruvian law, unless we dismiss someone for justified cause, we are required to pay the dismissed employee (but not directors) 1.5x annual salary for every year with our company for a period not to exceed 12 years. We are not required to make such payments in the event of voluntary termination. Although we have no ongoing obligation to do so, in the past we have provided, and in the future we may provide, such benefits to our executive officers upon their retirement. We have not set aside or reserved any amounts to provide for pension, retirement or other similar benefits.

Executive Compensation Plan

We establish and pay executive compensation in compliance with applicable labor and tax regulations and corporate governance standards and in accordance with market conditions.

145

We establish pay scales taking into consideration executives’ responsibilities, including the degree of complexity of those responsibilities, power of decision-making and scope of supervision entrusted.

The fixed salary component of compensation is established for each position based on a pay scale. Fixed salary includes family allowance and cost of living payments, if applicable. We evaluate executives at least once a year to develop action plans in furtherance of continuously improving management performance.

The variable component of compensation is paid to executives and other employees for meeting specific goals, and is related both to his or her performance and our financial results. Variable compensation is typically paid as an annual incentive.

In addition, labor regulation establishes a mandatory profit sharing provision of 5% of our total annual taxable income, to be distributed among all employees, calculated based on a formula established by law that considers the days worked in the year and remuneration.

Our executives also receive additional benefits, typically non-pecuniary. The benefits granted include: (i) a vehicle owned and maintained by our company, with the purpose of facilitating transportation of executives in the performance of their functions; (ii) a fuel allowance to offset transportation costs in the performance of their functions; and (iii) an insurance policy, including work accident and high risk coverage.

In addition, we have established a plan for certain executives effective March 2013 that awards cash bonuses for the exclusive use of purchasing shares of our company or of our subsidiaries. The executive must agree to hold the shares for a specific period. If the executive is no longer employed with our company during such period, we are entitled to repurchase the shares at the original purchase price. This benefit is awarded at the discretion and subject to the approval of the Human Resource Management Committee of our board of directors.

C. Board Practices

Board Committees

We have four board committees comprised of members of our board of directors.

Audit and Process Committee

Our Audit and Process Committee is comprised of four directors, all of which are independent under the Exchange Act. The current members of our Audit and Process Committee are Mr. Pedro Pablo Errázuriz Domínguez, Mr. Manuel del Río (chairman of the committee) Mr. Alfonso de Orbegoso and Mr. Esteban Vitón. These directors have extensive business and economic experience in Peru. Mr. Manuel del Río qualifies as an “audit committee financial expert” in accordance with NYSE independence standards and applicable SEC rules. Our Audit and Process Committee oversees our corporate accounting and financial reporting process. The Audit and Process Committee is responsible for:

• reviewing our financial statements;

• evaluating our internal controls and procedures, and identifying deficiencies;

• recommending to our annual shareholders’ meeting the appointment of our external auditors, determining their compensation, retention and oversight, and resolving any disagreements that may arise between management and our external auditors;

• evaluating our company’s compliance with the Board of Director’s internal regulation, as well as with general principles of corporate governance;

146

• informing our board of directors regarding any issues that arise with respect to the quality or integrity of our financial statements, our compliance with legal or regulatory requirements, the performance and independence of the external auditors, or the performance of the internal audit function;

• establishing procedures for the reception, retention and treatment of complaints regarding accounting, internal controls or other auditing matters, including the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters;

• independently engaging its own counsel and any other advisers it deems necessary to fulfill its functions; and

• establishing policies and procedures to pre-approve audit and permissible non-audit services.

The chief audit executive reports to this committee. Our board of directors has adopted a written charter for our Audit and Process Committee that is included in the Charter of the Board of Directors, which is available on our website at www.granaymontero.com.pe.

Human Resource Management Committee

Our Human Resource Management Committee is comprised of four directors, four of which are independent in accordance with NYSE independence standards. The current members of the committee are Mr. Rafael Venegas (chairman of the committee), Mr. Pedro Pablo Errázuriz, Mr. Esteban Vitón and Mr. Ernesto Balarezo. The Human Resource Management Committee is responsible for:

• reporting to our board of directors on the appointment and dismissal of senior executives;

• reviewing and approving corporate goals and objectives relevant to CEO compensation, evaluating the CEO’s performance in light of those goals and objectives, and determining and approving CEO compensation;

• establishing compensation arrangements for senior executives in accordance with the financial results of our company; proposing measures to ensure transparency in the remuneration of directors and senior executives;

• evaluating our human resources policies, including succession plans;

• reporting to our board of directors on matters regarding related party transactions that could result in a conflict of interest; establishing our social responsibility policies; and

• appointing third-party independent compensation consultants, and establishing the compensation of and overseeing the third-party independent compensation consultants;

As a foreign private issuer, we are not required to maintain a compensation committee that complies with all of the U.S. laws and regulations and NYSE requirements applicable to U.S. issuers.

Strategy and Investment Committee

Our Strategy and Investment Committee is comprised of four directors, with independent members under NYSE independence standard, currently comprising the majority of the committee. The current members of the committee are Mr. Augusto Baertl, Mr. Rafael Venegas, Mr. Christian Laub and Mr. Ernesto Balarezo Valdez (chairman of the committee).

147

The Strategy and Investment Committee is responsible for:

• establishing our investment policies;

• approving our annual investment plan; and

• analyzing the projects that would require an investment greater than US$5 million.

Risk, Compliance and Sustainability Committee

Our Risk, Compliance and Sustainability Committee is comprised of four directors, with independent members under NYSE independence standard, currently comprising the majority of the committee. The current members of the committee are Mr. Christian Laub (chairman of the committee), Mr. Augusto Baertl, Mr. Ernesto Balarezo and Mr. Manuel del Río. The Risk, Compliance and Sustainability Committee is responsible for:

• approving the structure, and evaluating the performance of the organization, in matters of risks and compliance;

• approving the policies and limits of exposure to risk, monitoring the risk profile of our company, and supervising the development of the risks and compliance area;

• ensuring compliance with our company’s policies, in particular with the anti-corruption policy and the sustainability policy, as well as with applicable laws. This committee can also propose policies, directives and/or complementary procedures that contribute to strengthening the responsible management of our company; and

• supervising and reporting to our board of directors on social responsibility practices and management.

The Chief Risk and Compliance Officer reports to this committee.

Operating Board Committees

We also have two operating board committees that meet monthly and are comprised of members of our board of directors, including at least one independent member under NYSE independence standards per committee.

Engineering and Construction Committee

Our Engineering and Construction Committee supervises the operations of our E&C segment. The current members of the committee are Mr. Augusto Baertl, Mr. Christian Laub and Mr. Alfonso de Orbegoso.

Infrastructure Committee

Our Infrastructure Committee supervises the operations of our Infrastructure segment. The current members of the committee are Mr. Rafael Venegas, Mr. Manuel del Río and Mr. Pedro Pablo Errázuriz.

D. Employees

We have developed an extensive and talented team, including more than 1,900 engineers, which gives us the capability and scale to undertake large and complex projects. We also have access to a network of approximately 132,000 manual laborers throughout Peru that can supplement our workforce when required by our projects. Moreover, we have the flexibility to engage our own workers on projects outside Peru, avoiding the need to seek new employees in other countries.

As of December 31, 2019, we had a total of 15,164 full-time employees, including approximately 9,949 manual laborers, a number that fluctuates depending on our project backlog. At such date, we also worked with 3,336 employees of subcontractors. Occasionally, we employ subcontractors for particular aspects of our projects, such as carpenters, specialists in elevator installation and specialists in glassworks. We are not dependent upon any particular subcontractor or group of subcontractors. As of December 31, 2019, 16% of our employees worked outside Peru. The following table sets forth a breakdown of our employees by category as of December 31, 2019.

148

Salaried Employees	E&C		Infrastructure		Real Estate		Corporate(3)		TOTAL(4)
Engineers		1,128		404		34		43		1,609
Other Professionals		315		358		44		161		878
Technical specialists		955		554		38		46		1,593
Manual Laborers(1)		8,232		1,717		0		0		9,949
Joint operation employees(2)		1,050		85		0		0		1,135
Subtotal		12,436		3,118		116		251		15,164
Subcontracted employees		1,876		1,450		0		10		3,336
Total		14,442		4,568		116		261		18,500

(1) The number of manual laborers, who form part of our network of approximately 132,000 manual laborers, varies in relation to the number and size of projects we have in process at any particular time.

(2) Includes engineers, professionals, technical specialists and manual laborers employed by our joint operations.

(3) Includes the company and our subsidiary Qualys S.A.

(4) Excludes our subsidiary Adexus, which we are in the process of marketing for sale.

The following chart sets forth the changes of our total employees from December 31, 2014 to December 31, 2019.

Total Employees

Our talent development system has allowed us to develop a team of professionals with the ability to design and implement sophisticated projects. Our talent management process broadly focuses on attracting, developing and training employees.

We have implemented programs to attract young and qualified candidates. Our “Cantera” Program offers various types of internships and training opportunities to engineering students and recent graduates, rewarding the most successful candidates with the opportunity to work as full-time, permanent employees. Our focus is not only to attract talented people but also to retain them.

Through our Graña y Montero Academy, we offer continuing education opportunities through a wide selection of courses and training programs targeted at each level. We believe the knowledge that our employees gain through these programs is reflected in the way they work and relate to our clients, adding value in every step. During 2019, we invested more than US$23,000 in continuing education, reaching approximately 305,000 training hours for our employees.

149

We place significant emphasis on instilling our core corporate values of quality, professionalism, reliability and efficiency on our employees, and on promoting safety, environmental sustainability and social responsibility throughout the entire organization. Our Code of Conduct and Charter of Ethics regulate the conduct of our employees while promoting the foregoing values. In addition, our employees participate in ethics seminars on a periodic basis.

Substantially all of our manual laborers and some of our other employees are members of labor unions. Our practice is generally to extend the benefits we offer our unionized employees to non-unionized employees. We consider our current relationship with unions to be positive.

In our E&C segment, collective bargaining agreements are negotiated at two levels: (i) on an annual basis between the National Federation of Civil Construction and the Peruvian Chamber of Construction, without our direct involvement; and (ii) on a per project basis directly between the unions and our project committees, in accordance with such annual agreement. In addition, some of our personnel in our gas processing plant belongs to the labor union Unicode Workers Union GMP S.A. We currently have collective bargaining agreements with some of our gas processing plant workers. These collective bargaining agreements are negotiated on an annual basis.

Safety

We safeguard the health and safety of our employees and of all the persons present in our operations and services. To that end, we provide safe work conditions, we manage risks in a timely manner and we promote a culture of prevention, starting from the leadership and commitment of our senior management.

In 2019, our company trained our top and middle management, collaborators and suppliers or subcontractors in security matters. During this period, we reported an accident incidence rate of 0.25 accidents for every 200,000 hours worked, remaining at a level similar to 2018.

Our occupational health and safety management system in all of our subsidiaries (Chile, Peru and Colombia) is certified by OHSAS 18001. We believe a safe job site contributes to our reputation and ability to gain new business while enhancing employee morale and reducing costs and exposure to liability.

Under our framework, we have provided over 91,792 hours of training in risk prevention for managers and directors, more than 495,000 hours of training for employees and nearly 326,000 hours of training for subcontractors. Additionally, to improve the leadership and commitment of our chain of command, these training sessions were complemented with periodic manager’s visits to projects, the establishment of annual safety goals based on the type of activity, the generation of opportunities to share lessons learned, and the monitoring of safety panels by our board of directors.

E. Share Ownership

As of March 31, 2020, persons who are currently members of our board of directors and our executive officers held as a group 1,023,076 of our common shares. Our directors and executive officers hold, in the aggregate, less than 1% of our outstanding share capital. Our directors and executive officers who in the aggregate hold less than 1% interest in our company are: Mr. Pedro Pablo Errázuriz, Mr. Roberto Abusada, Mr. Christian Laub. Mr. Luis Francisco Díaz Olivero, Mr. Antonio Rodríguez, Ms. Mónica Miloslavich, and Mr. Antonio Cueto.

Our directors and executive officers do not have different voting rights.

We have established a plan for certain executives effective since March 2013 that awards cash bonuses for the exclusive use of purchasing shares of our company or of our subsidiaries. The executive must agree to hold the shares for a specific period. If the executive is no longer employed with our company during such period, we are entitled to repurchase the shares at the original purchase price. This benefit is awarded at the discretion and subject to the approval of the Human Resource Management Committee of our board of directors.

150

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

As of March 31, 2020, our issued and outstanding share capital was comprised of 871,917,855 common shares. The following table sets forth the beneficial ownership of our common shares as of March 31, 2019, based on information provided to us by CAVALI S.A. ICLV, the Peruvian clearing house (“CAVALI”) and The Bank of New York Mellon, as depositary for the holders of ADS, except as set forth below.

Shareholder	Number of shares		Percentage owned
GH Holding Group(1)		117,527,103		13.48	%
Pacifico Corp S.A.C. (2)		87,191,786		10.00	%
Fratelli Investment Limited(3)		86,633,390		9.94	%
AFP INTEGRA S.A. (Sura Group)		72,296,726		8.29	%
AFP PRIMA S.A. (Grupo Crédito)		61,902,445		7.10	%
Aberdeen Asset Management PLC(4)		40,202,485		4.61	%
AFP PROFUTURO S.A. (Grupo Scotiabank)		38,751,338		4.44	%
Bethel Enterprises Inc.(5)		33,785,285		3.87	%
The Bank of New York Mellon, as depositary for the holders of ADS(6)		114,940,479		13.18	%
Other Shareholders(7)		218,686,818		25.09	%
Total		871,917,855		100.00	%

(1) GH Holding Group is owned by: (i) Enriqueta Graña Miró Quesada, with 30.0%; José Graña Miró Quesada, our former chairman, with 26.1%; Teresa Canepa Yori de Graña, with 26.1%; Maria Francisca Graña Canepa, with 6.0%; and Maria Teresa Graña Canepa, with 6.0%; and Luis Brahim, with 5.8%.

(2) Based on a Form 13G filed with the SEC on May 1, 2019.

(3) Based on a Form 13G filed with the SEC on February 12, 2019.

(4) Based on a Form 13G filed with the SEC on February 11, 2020.

(5) Mr. Carlos Montero, a former board member of the company, indirectly owns 33,785,285 common shares, representing 3.87% of our outstanding share capital, through Bethel Enterprises Inc.

(6) Excluding AFP PRIMA S.A., AFP INTEGRA S.A., Aberdeen Asset Management PLC, and Fratelli Investment Limited’s beneficial ownership of our common shares as of March 31, 2020.

(7) Among other shareholders, the following directors and executive officers hold directly or indirectly common shares of our outstanding share capital: Mr. Roberto Abusada, a member of our board of directors, Mr. Pedro Pablo Errázuriz, a member of our board of directors, Mr. Christian Laub, a member of our board of directors, Mr. Luis Francisco Díaz Olivero, Chief Executive Officer, Ms. Mónica Miloslavich, our Chief Financial Officer, Mr. Antonio Rodríguez, Chief Investment Officer, and Mr. Antonio Cueto, Chief Operations Officer, hold in aggregate less than 1% of our outstanding share capital.

As of March 31, 2020, 25 record holders of our common shares were located in the United States (including Bank of New York Mellon, as depositary for the holders of ADS), according to CAVALI.

Certain of our directors and executive officers directly or indirectly own shares of our subsidiaries, none of which constitute 1% or more of the outstanding share capital of any such subsidiary: Mr. Julio de la Piedra del Rio, Chief Executive Officer of GyM, owns common shares of GyM; Mr. Rolando Ponce, Chief Executive Officer of Viva GyM owns shares of Viva GyM; and Eduardo Villa Corta, chief executive officer of GMI, owns shares of GyM and shares of GMI.

The following table sets forth the changes in beneficial ownership of our common shares from December 31, 2017, to December 31, 2019, based on information provided to us by CAVALI and the depositary for the holders of ADS. ADS data as of December 31, 2017 was provided by JPMorgan Chase Bank NA, as depositary. ADS data as of December 31, 2018 and 2019 was provided by The Bank of New York Mellon, as depositary.

151

	As of December 31, 2017				As of December 31, 2018				As of December 31, 2019
Shareholders	No. of Shares		Percentage Owned		No. of Shares		Percentage Owned		No. of Shares		Percentage Owned
GH Holding Group(1)		117,538,203		17.81		117,538,203		16.11		117,538,203		13.48
AFP PRIMA S.A.		74,011,175		11.21		61,902,445		8.49		61,902,445		7.10
IN-CARTADM (AFP Integra-Sura Group)		72,223,691		10.94		72,296,726		9.91		72,296,726		8.29
PR-CARTADM (Profuturo AFP-Grupo Scotiabank)		23,136,533		3.51		38,751,338		5.31		38,751,338		4.44
Aberdeen Asset Management PLC(2)		49,730,025		7.53		43,298,200		5.94		40,202,485		4.61
Bethel Enterprises Inc.(3)		33,785,285		5.12		33,785,285		4.63		33,785,285		3.87
JPMorgan Chase Bank NA, as depositary for the holders of ADS(4)		96,482,855		14.62		—		—		—		—
The Bank of New York Mellon, as depositary for the holders of ADS(5)		—		—		75,050,020		10.29		88,254,945		10.12
PACIFICO CORP S.A.C(6)		—		—		—		—		87,191,786		10.00
FRATELLI INVESTMENTS LIMITED(7)		—		—		72,454,772		9.93		86,633,390		9.94

(1) GH Holding Group is owned by: Enriqueta Graña Miró Quesada, with 30.0%; José Graña Miró Quesada, our former chairman, with 26.1%; Teresa Canepa Yori de Graña, with 26.1%; Maria Francisca Graña Canepa, with 6.0%; and Maria Teresa Graña Canepa, with 6.0%; and Luis Brahim, with 5.8%.

(2) Based on Forms 13G filed with the SEC on February 6, 2018, February 12, 2019 and February 11, 2020, respectively.

(3) Mr. Carlos Montero, a former board member of the company, indirectly owns 33,785,285 common shares, representing 3.87% of our outstanding share capital, through Bethel Enterprises Inc.

(4) As of December 31, 2017, 2018 and 2019, excludes shares of Aberdeen Asset Management PLC, AFP PRIMA S.A. and AFP INTEGRA S.A.

(5) Depositary change reported through Form 6-K filed on December 10, 2018.

(6) Based on a Form 13G filed with the SEC on May 1, 2019.

(7) Based on Forms 13G filed with the SEC on February 12, 2019 and June 8, 2018.

Our major shareholders do not have different voting rights.

In December 2018, our company issued and sold a total of 69,380,402 common shares through a combination of preemptive rights to the company’s existing shareholders and a private placement. On April 2, 2019 our company issued and sold 142,483,633 common shares pursuant to a private placement.

B. Related Party Transactions

Peruvian Law Concerning Related Party Transactions

Peruvian law sets forth certain restrictions and limitations on transactions with certain related parties.

Valuation: from a tax standpoint, the value of those transactions must be equal to the fair market value assessed under transfer pricing rules, i.e., the value agreed to by non-related parties under the same or similar circumstances. Similarly, companies with securities registered in the Peruvian Public Registry of Securities (Registro Público del Mercado de Valores), such as us, are required to comply with the following rules:

• The directors and managers of our company cannot, without the prior authorization of the board of directors, (i) receive in the form of a loan money or assets of our company; or (ii) use, for their own benefit or for the benefit of related parties, assets, services or credits of our company.

• The execution of agreements that involve at least 5% of the assets of our company with persons or entities related to directors, managers or shareholders that own, directly or indirectly, 10% of the share capital, requires the prior authorization of the board of directors (with no participation of the director involved in the transaction, if any).

• The execution of agreements with a party controlled by our company’s controlling shareholder requires the prior authorization of the board of directors and an evaluation of the terms of the transaction by an external independent company (audit companies or other determined by Resolución SMV N° 029-2018-SMV-01).

Independent review: the external independent company that reviews the transaction should not be related to the parties involved therein, nor to directors, managers or shareholders that own at least 10% of the share capital of such parties involved.

152

Terms and conditions: As a general policy, we do not enter into transactions with directors and executive officers on terms more favorable than what we would offer third parties. Any related party transaction we have entered into in the past has been in the ordinary course of business and on an arm’s length basis.

Approve and accounting: Article 30 of the internal regulations of our board of directors establishes a review procedure for identifying, approving and accounting for related party transactions. Related party transactions are defined as any transaction entered into by and among our company and any shareholder that owns 1% or more of our company’s or of our subsidiaries’ outstanding shares, directors, senior executives and persons related to them. The Risk, Compliance and Sustainability Committee is responsible for approving each such transaction considering market conditions and potential benefits for us and the related party. For ordinary course transactions carried out under market conditions, the authorization is delegated to the operations of the business line. For more information, see “Item 6. Directors Senior Management and Employees—Management.”

Related Party Transactions

We enter into certain related party transactions in the ordinary course of our business. No such transactions in effect during 2019 were material to our company or, to our knowledge, to any such related party, nor were any such transactions unusual in their nature or condition. Related party transactions with the following parties were in effect in 2019:

• In April 2018, we signed a consulting agreement with Augusto Baertl, our Chairman of the Board of Directors, in the amount of S/420,000 (US$124,000). The contract has a term of 36 months.

• In 2019, our subsidiary GMP signed a consulting agreement with Francisco Dulanto, director of GMP, in the amount of S/342,240 (US$103,178).

• In 2019, our subsidiary Morelco signed a purchase agreement with Agora Safety, supplier of equipment for a total value of US$101,506. The company is own by the sister-in-law of Arturo Serna, a director of Morelco.

C. Interests of Experts and Counsel

Not applicable.

ITEM 8. FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information.

See Item 18 of this annual report on Form 20-F.

Legal and Administrative Proceedings

Our company and certain of our subsidiaries, and certain of our former directors and senior management, have been charged in connection with criminal and civil investigations relating to certain of our projects in connection with our association with Odebrecht and in connection with our alleged participation in what is referred to as the “construction club.”

In connection with investigations relating to the IIRSA South project concession (tranches II and III), the Peruvian criminal prosecutor moved to charge our company and our construction subsidiary, GyM, as criminal defendants in connection with the project. In response, the Peruvian First National Preparatory Investigation Court (Primer Juzgado de Investigación Preparatoria Nacional) notified us of its decision to formally include our company and GyM in its criminal investigation. We appealed the court’s decision and, in June 2018, the First Court of Appeals of the Superior Court of Lima revoked the judicial order that indicted our company and GyM, among other corporate defendants, in the criminal investigation on charges of collusion and other crimes and rejected the petition, without prejudice, made by the prosecutor to incorporate both companies in the aforementioned process. Nevertheless, in February of 2020, we were notified that the criminal prosecutor had filed a new motion to bring criminal charges against our company and GyM in connection with the IIRSA South project concession (tranche II). We cannot predict the outcome of this motion.

153

Separately, in connection with these investigations, in December 2018, the Peruvian First National Preparatory Investigation Court resolved to include our company and GyM as civilly-responsible third parties in the investigations related to the IIRSA South project concession (tranche II) and GyM as a civilly-responsible third party in the investigations related to Tranches 1 and 2 of the Lima Metro. These proceedings are ongoing.

Peruvian prosecutors have included José Graña Miró Quesada, a shareholder and the former Chairman of our company, in an investigation for the crime of collusion, and Hernando Graña Acuña, a shareholder, a former board member of our company and former chairman of our subsidiary GyM, for the crime of money laundering against the Peruvian government, each in connection with the IIRSA South project concession (tranche II), in which we participated with Odebrecht. Gonzalo Ferraro Rey, the former Chief Infrastructure Officer of our company, has also been included in an investigation for the crime of money laundering in connection with the same project. In addition, José Graña Hernando Graña, as well as Juan Manuel Lambarri, the former chief executive officer of our engineering and construction business have been charged in connection with Tranches 1 and 2 of the Lima Metro project. In August 2019, José Graña indicated in public statements to the media that he and Hernando Graña had initiated a process of plea bargaining with Peruvian prosecutors in respect of multiple projects in which our company participated with Odebrecht and in respect of the alleged “construction club.” According to José Graña’s public statements, in the plea bargaining process, both he and Hernando Graña are cooperating with the Peruvian prosecutor, which may include providing information related to wrongdoing or knowledge of improper behavior while they were at the company. However, given the confidential nature of these proceedings, the reported information is limited and difficult to verify. We cannot assure you what they will ultimately say to the government, or that their statements will not adversely affect the company’s business.

INDECOPI initiated in 2017 investigations regarding allegations that certain construction companies in Peru, including our subsidiary GyM, colluded as a “construction club” to receive public contracts. In February 2020, INDECOPI initiated an administrative proceeding against several construction companies, including our subsidiary GyM, aiming to impose civil fines on the investigated companies.

Separately, in December 2018, GyM was formally included as a civilly-responsible third party, along with eleven other construction companies, in the criminal investigation conducted by a Peruvian public prosecutor based on facts similar to those under investigation by INDECOPI. In December 2019, the prosecutor criminally charged GyM and another of our subsidiaries, CONCAR, and other companies in the construction sector in Peru, as well as a former director and senior management of our company, with collusion and other alleged crimes. For more information, see “Item 3.D.-Key Information-Risk Factors-Risks Related to Recent Developments (2017-2020)- Investigations regarding potential corruption or other illegal acts could have a material adverse effect on our business, financial condition and results of operations”

In December 2019, we entered into a preliminary settlement and cooperation agreement with the Peruvian anticorruption prosecutor and the ad hoc Peruvian state counsel in respect of investigations relating to past projects in which the company participated with Odebrecht, including the GSP project, and the “construction club” investigation. The terms of the preliminary settlement and cooperation agreement are confidential in accordance with Peruvian law and under discussion with Peruvian authorities. Although in the preliminary settlement and cooperation agreement, the Peruvian government undertook to enter into a final settlement and cooperation agreement within sixty business days, we have not reached a final agreement, and the parties continue to discuss the terms of the settlement.

A class action civil lawsuit was filed in 2017 against our company and certain of our former directors and former and current executive officers in the United States. In February 2020, we executed a term sheet with the plaintiffs that provides the general terms and conditions for a final settlement agreement. The term sheet stipulates a settlement amount of US$20 million plus interest after a certain time period. The company recorded provisions of US$15 million as of December 31, 2019, and the remaining US$5 million is expected to be covered by the company’s D&O insurance. It is not certain whether the negotiation of a final settlement agreement will be successful, and, if so, whether any such agreement will be approved by the court. If a final settlement is not rendered and approved by the court, we would expect the lawsuit to resume.

154

Dividends and Dividend Policy

Dividend Policy

Our current dividend policy, adopted on March 29, 2016, is to distribute between 30% and 40% of the net profit from the preceding year, as long as we hold such net profit on a consolidated basis, subject to contractual restrictions on our indebtedness. Holders of our common shares are entitled to receive dividends on a pro rata basis in accordance with their respective number of shares held. Our dividend policy can be modified by a favorable vote of a majority of our shareholders and any changes become effective 30 days after approval. Dividends will not be distributed in advance.

Article 23 of our by-laws establishes that dividends distribution must be approved by our shareholders during the annual shareholders’ meeting. The recommendation of our board of directors is required for the distribution of interim dividends, which must be subsequently ratified at a shareholders’ meeting.

Under Peruvian law, companies may distribute up to 100% of their profit (after payment of income tax) subject to a 10% legal reserve until the legal reserve equals 20% of the total value of their capital stock. According to Article 40 of the Peruvian Corporate Law, in order to distribute dividends, profits must be determined in accordance with the individual financial statements of our company.

Payment of Dividends

Dividends are paid to holders of our common shares as of a record date determined by us. In order to allow for the settlement of securities, under the rules of the Peruvian Securities Commission, investors who purchase shares of a publicly-held company three business days prior to a dividend payment date do not have the right to receive such dividend payment. Dividends on issued and outstanding common shares are distributed pro rata.

We will not be able to make any dividend payments until all outstanding amounts under the Financial Stability Framework Agreement and the CS Peru Infrastructure Loan have been repaid or discharged in full. In addition, the indentures of the senior secured notes issued by GyM Ferrovías and the corporate bonds issued by Norvial contain certain customary covenants, including restrictions on our and our subsidiaries’ ability to pay dividends if we are in default under the agreement, and the corporate bonds of GyM imposes a limitation to GyM to distribute dividends to us. “Item 5.B. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Indebtedness.”

Holders of common shares are not entitled to interest on accrued dividends. In addition, under Article 232 of the Peruvian Corporate Law, the right to collect accrued dividends declared by a publicly-held company expires ten years from the original dividend payment date.

Previous Dividend Payments

No dividends were declared or paid from 2017-2019 for our common shares.

B. Significant Changes.

Except as disclosed in “Item 5. Operating and Financial Review and Prospects— Recent Developments (2017—2020)—The Impact of the Ongoing Novel Coronavirus (COVID-19) Pandemic,” and notes 4.4 and 37 to our audited annual consolidated financial statements included in this annual report, we have not experienced any significant changes since the date of our audited annual consolidated financial statements included in this annual report.

155

ITEM 9. THE OFFER AND LISTING

A. Offer and Listing Details

Our ADSs

On July 29, 2013, we completed our initial equity offering in the United States of 19,534,884 ADSs, representing 97,674,420 common shares. Our ADSs are listed on the NYSE under the symbol “GRAM.” On May 31, 2020, the closing price on the NYSE was US$2.1 per ADS. On May 17, 2018, the NYSE suspended the trading of our ADSs and commenced proceedings to delist our company. Our company appealed the decision. From May 21, 2018 until July 5, 2018, our ADSs were available for trading on the over-the-counter (OTC) market in the United States. On Friday, July 6, 2018, trading of our ADSs resumed on the NYSE.

Our Common Shares

Our common shares are registered in the Public Registry of Securities held with the Peruvian Securities Commission and are listed on the Lima Stock Exchange under the symbols “GRAMONC1”. On May 31, 2020, the closing price on the Lima Stock Exchange was S/1.50 per common share. As of May 31, 2020, 23 record holders of our common shares were located in the United States, according to CAVALI.

B. Plan of Distribution

Not applicable.

C. Markets

Trading in the Peruvian Securities Market

Lima Stock Exchange

As of the day of this annual report, there were 259 companies listed on the Lima Stock Exchange. Established in 1970, the Lima Stock Exchange is Peru’s only securities exchange. On November 19, 2003, the members of the Lima Stock Exchange approved to convert its corporate status to a publicly held corporation. As of May 31, 2020, the Lima Stock Exchange had a share capital of S/182,092,340, divided into 173,659,481 class “A” shares and 8,432,859 class “B” shares of par value S/1.00 each. Class “A” shares are entitled to one vote per share while class “B” shares do not have voting rights.

Trading on the Lima Stock Exchange is primarily done on an electronic trading system that became operational in August 1995. From the second Sunday of March through the first Sunday of November of each year, trading hours are Monday through Friday (except holidays) as follows: 8:20 a.m.-8:30 a.m. (pre-market ordering); 8:30 a.m.-2:52 p.m. (trading); 2:52 p.m.-3:00 p.m. (after-market sales); and 3:02 p.m.-3:10 p.m. (after-market trading). At all other times, trading hours are from Monday to Friday (except holidays) as follows: 9:00 a.m.-9:30 a.m. (pre-market ordering); 9:30 a.m.-3:55 p.m. (trading); 3:55 p.m.-4:00 p.m. (after-market sales); and 4:00 p.m.-4:10 p.m. (after-market trading).

Substantially all of the transactions on the Lima Stock Exchange are traded on the electronic system. Transactions during the electronic sessions are executed through brokerage firms and stock brokers on behalf of their clients. Brokers submit orders in the order in which they are received. The orders must specify the type of security as well as the amount and price of the proposed sale or purchase. In order to control price volatility, the Lima Stock Exchange imposes a 15-minute suspension on trading when the price of a security varies on a single day by more than 15% for Peruvian companies and 30% for non-Peruvian companies.

156

Certain information regarding trading on the Lima Stock Exchange is set forth in the table below:

	2015		2016		2017		2018		2019
Market capitalization (in millions of soles)(1)		309,412		416,787		526,841		481,081		537,389
Volume (in millions of soles)		12,001		15,342		29,022		20,975		18,154
Average daily trading volume (in millions of soles)		48		61		116		84		72

(1) End-of-period figures for trading on the Lima Stock Exchange.

The stock market capitalization of companies listed on the Lima Stock Exchange was US$162.0 billion at the end of 2019, compared to US$90.7 billion, US$124.0 billion, US$162.4 billion and US$142.4 billion at the end of 2015, 2016, 2017 and 2018, respectively.

Total market volume in 2019 was US$5.5 billion, reflecting a 11.8% decrease compared with 2018. Equity market volume, which represented 66.3% of total market volume, ended the 2019 year at US$3.6 billion, 7.0% higher than the previous year. The repo market, which represented 10.1% of total market volume, reported volume of US$553.6 million in 2019, reflecting a decrease of 20.2%.

The total number of operations in the market in 2019 decreased by 21.5%, closing the year at 89,353 operations. The number of operations in the equity market in 2019 decreased by 21.9% to 80,090 operations.

In 2017, the S&P/BVL Peru General Index (Índice S&P/BVL Peru General) reached 19,974 points, increasing 28.3% compared to 2016. In 2018, it reached 19,350 points, decreasing 3.1% compared to 2017; and in 2019, it reached 20,526 points, increasing 6.1% compared to 2018.

Regulation of the Peruvian Securities Market

The regulatory framework for the Peruvian securities market is established in the Securities Market Law approved by Legislative Decree No. 861, as amended (Ley del Mercado de Valores), and the resolutions issued from time to time by the Peruvian Securities Commission. The purpose of the Securities Market Law is to promote the ordered development and transparency of the Peruvian securities markets and provide adequate protection for investors and the principles under which the Peruvian securities market is intended to operate. The Securities Market Law contains the general rules for: (i) primary and secondary public offerings of securities; (ii) public offering of securities for acquisitions and sales; (iii) local and international offerings, including simultaneous offerings; (iv) the Public Registry of Securities (Registro Público del Mercado de Valores); (v) reporting obligations of material information (hechos de importancia) by the issuers of securities recorded in the Public Registry of Securities and by the entities that are subject to the regulation and supervision of the Peruvian Securities Commission; (vi) the enforcement of insider trading; (vii) privileged information and confidentiality regulations and prohibitions against price manipulation; (viii) the broker-dealers; (ix) the Lima Stock Exchange; (x) CAVALI (the settlement and registry entity for transactions executed on the Lima Stock Exchange); (xi) other entities that are required to be registered at the Peruvian securities market Public Registry of Securities; (xii) capital market instruments and operations, including securitizations; and (xiii) mutual funds and investments funds publicly placed and their respective management companies.

The Peruvian securities market is regulated and supervised by the Peruvian Securities Commission (Superintendencia del Mercado de Valores), a governmental entity reporting to the Peruvian Ministry of Economy and Finance, with functional, administrative, economic, technical and budgetary autonomy. The Peruvian Securities Commission is governed by the Superintendent, designated by the Peruvian Ministry of Economy and Finance, and by a five-member board of directors convened by the Superintendent (who acts as Chairman of the board). The other four members are appointed by the government under applicable legislation. The Peruvian Securities Commission issues from time to time resolutions which provide specific regulations or may impose sanctions in cases of violations of the Securities Market Law or the resolutions issued by the Peruvian Securities Commission.

The Peruvian Securities Commission, in order to achieve the Securities Market Law’s purposes, has broad regulatory and supervisory powers, including (i) issuing general mandatory rules; (ii) supervision and oversight of compliance with applicable legislation (including the power to order inspections and require the submission of information and documentation by entities that are under its jurisdiction and summon and interrogate any person that may contribute to its investigations); (iii) imposing sanctions; (iv) managing the Peruvian securities market public

157

registry; (v) verifying that public offerings meet filing requirements and that the securities subject to such offerings are duly recorded at the Peruvian securities market public registry of securities; (vi) authorizing the incorporation and functioning of entities under its scope of supervision; and (vii) monitoring the content and accuracy of the financial and other information that is filed with the Peruvian Securities Commission. The Peruvian Securities Commission is responsible for the enactment, interpretation and enforcement of rules and regulations issued under the Securities Market Law.

Disclosure Obligations

Issuers of securities registered with the Peruvian Securities Commission are required to disclose material information relating to the issuer. Pursuant to the Securities Market Law and relevant regulations enacted thereunder, all material information in connection with the issuer of registered securities (such as our common shares), its activities or securities issued or secured by such issuer which may influence the liquidity or price of such securities must be disclosed. Accordingly, issuers must file with the Peruvian Securities Commission mainly two types of information: (i) financial information, including unaudited interim financial statements on a quarterly basis (which are not required to be subject to limited review by external auditors), and audited annual consolidated financial statements on an annual basis, and (ii) material information relating to the issuer and its activities that may significantly affect the price, offering or trading of the issued securities, and in general, all the information that may be relevant for investors to be able to make investment decisions.

In order to comply with the foregoing disclosure obligations, issuers must disclose information to the Peruvian Securities Commission and, if the securities are listed, with the Lima Stock Exchange as soon as practicable but not later than the day on which the event took place or the issuer became aware of such information.

D. Selling Shareholders

Not applicable.

E. Dilution

Not applicable.

F. Expenses of the Issue

Not applicable.

ITEM 10. ADDITIONAL INFORMATION

A. Share Capital

Not applicable.

B. Memorandum and Articles of Association

The information set forth in Exhibit 10.05, “Description of Securities Registered Pursuant to Section 12 of the Exchange Act” is incorporated herein by reference.

C. Material Contracts

CS Peru Infrastructure Loan

On July 31, 2019, the company entered into a medium term loan credit agreement for US$35 million (equivalent to S/112.9 million) with CS Peru Infrastructure Holdings LLC (the “CS Peru Infrastructure Loan”), the proceeds of which were used as working capital for the company and its subsidiaries, GyM and Adexus. The term of the loan is three years, with quarterly installments of principal beginning on the 18th month. The loan accrues interest at the

158

following rates per annum: (i) for the period from and including the July 31, 2019 to but excluding the date that is six months after the closing date, 9.10%; (ii) for the period from and including the date that is six months after the closing date to but excluding the date that is one year after the closing date, 9.35%; (iii) for the period from and including the date that is one year after the closing date to but excluding the date that is 30 months after the closing date, 9.60%; and (iv) for the period from and including the date that is 30 months after the closing date to the third anniversary of the loan, 10.10%. On November 19, 2019, a filing of a preventive bankruptcy proceedings by the company’s subsidiary Adexus triggered an event of default under the CS Peru Infrastructure Loan. On February 28, 2020, the company and the initial lender signed an amendment, waiver and consent in respect of this event of default, in consideration for a prepayment by the company of US$10 million, together with accrued interest and a make-whole premium.

The principal amount outstanding under the new term loan was US$25 million (S/83 million) as of the date of this report. For more information, see “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Indebtedness.” This agreement and the amendment thereto have been incorporated by reference as Exhibit 10.01 to this annual report.

Financial Stability Framework Agreement

On July 31, 2017, we, and certain of our subsidiaries, GyM, Construyendo País S.A., Vial y Vives—DSD and Concesionaria Vía Expresa Sur S.A., entered into a Financial Stability Framework Agreement with the following financial entities: Scotiabank Peru S.A.A., Banco Internacional del Perú S.A.A., BBVA Peru, Banco de Crédito del Perú, Citibank del Perú S.A. and Citibank N.A. As of December 31, 2019, US$46.5 million (S/154.2 million) was outstanding under the Financial Stability Framework Agreement. For more information, see “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Indebtedness.” This agreement and the amendment thereto have been incorporated by reference as Exhibit 10.02 to this annual report.

GSP Concession and Subordination Arrangements

In November 2015 we acquired a 20% interest in GSP, an entity which, on July 22, 2014, signed a concession agreement with the government of Peru to build, operate and maintain the natural gas pipeline transportation system to satisfy the demand of certain cities in the southern region of Peru.

On January 24, 2017, the government of Peru terminated the contract, due to the impossibility of obtaining financial closing. In accordance with the concession contract, the Peruvian government is required to carry out an auction process to sell GSP’s assets and obtain a new concessionaire within one year of the contract termination, with the funds raised in the sale to be used to pay the existing concessionaire for its investment in the project. Although the concession contract provides that payment must be made within one year of termination, the Peruvian Ministry of Energy and Mines has not made payment or, to our knowledge, initiated the payment process. A summary of these provisions of the concession contract have been incorporated by reference as Exhibit 10.03 to this annual report.

In 2016, in connection with efforts to restructure or sell Odebrecht’s participation in GSP, due to the corruption scandal surrounding Odebrecht, Odebrecht contractually agreed to subordinate its claims under the concession to the other project partners, Enagas and ourselves. As a result, we and Enagas may be entitled to repayment of our percentage payment under the concession contract prior to Odebrecht. On January 3, 2018, Odebrecht commenced arbitration proceedings against us, our subsidiary GyM and Enagas, seeking to invalidate the contractual subordination, but Odebrecht subsequently withdrew the claim. This agreement and the amendments thereto have been incorporated by reference as Exhibit 10.04 to this annual report.

On December 4, 2017, GSP voluntarily commenced bankruptcy proceedings in Peru. GSP’s assets will be liquidated pursuant to Peruvian law. GSP’s only substantial asset is the claim for government payment described above, as contemplated under the concession contract in the event of termination.

Although the concession contract provides that payment must be made within one year of termination, the Peruvian Ministry of Energy and Mines has not made payment or, to our knowledge, initiated the payment process or the auction process for a new concessionaire. As a result, after the six-month period mandated by the concession contract for the parties to discuss the matter, in October 2019, we asserted our rights against the Peruvian government

159

by filing a request for arbitration before the International Centre for Settlement of Investment Disputes. However, in December 2019 we withdrew our request for arbitration, as required by Peruvian authorities under the preliminary settlement and cooperation agreement we entered into with Peruvian anticorruption prosecutor and the ad hoc Peruvian state counsel. For more information, see “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Recent Developments (2017—2020)— Termination of the Gasoducto Sur Peruano Concession.”

D. Exchange Controls

Since August 1990, there have been no exchange controls in Peru and all foreign exchange transactions are based on free market exchange rates. Prior to August 1990, the Peruvian foreign market consisted of several alternative exchange rates. Additionally, during the 1990s, the Peruvian currency experienced a significant number of large devaluations, and Peru has consequently adopted, and operated under, various exchange rate control practices and exchange rate policies, ranging from strict control over exchange rates to market determination of rates. Current Peruvian regulations on foreign investment allow the foreign holders of equity shares of Peruvian companies to receive and repatriate 100 percent of the cash dividends distributed by such companies. Such investors are allowed to purchase foreign exchange at free market currency rates through any member of the Peruvian banking system and transfer such foreign currency rates through any member of the Peruvian banking system and transfer such foreign currency outside Peru without restriction.

E. Taxation

Peruvian Tax Considerations

The following is a general summary of material Peruvian tax matters under Peruvian law, as in effect on the date of this annual report, and describes the principal tax consequences of ownership of ADSs and common shares by non-resident individuals or entities (“Non-Peruvian Holders”). Legislative, judicial or administrative changes or interpretations may, however, be forthcoming. Any such changes or interpretations could affect the tax consequences to holders of ADSs and common shares and could alter or modify the conclusions set forth herein. This summary is not intended to be a comprehensive description of all of the tax considerations that may be relevant to a decision to make an investment in the ADSs or common shares. In addition, it does not describe any tax consequences arising under the laws of any taxing jurisdiction other than Peru or applicable to an individual or entity resident of Peru or to a person with a permanent establishment in Peru.

For purposes of Peruvian taxation:

• individuals are residents of Peru, if they are Peruvian nationals who have established their place of residence in Peru or if they are foreign nationals with a permanence of more than 183 days in Peru in any 12-month period (in the latter case, the condition of Peruvian resident can only be acquired as of the 1st of January of the year following the fulfillment of residence conditions); and

• legal entities are residents of Peru if they are established or incorporated in Peru.

Cash Dividends and Other Distributions

Cash dividends paid to Non-Peruvian Holders with respect to common shares and amounts distributed with respect to ADSs have been subject to Peruvian withholding income tax at a rate of 5% since 2017. As a general rule, the distribution of additional common shares representing profits, the distribution of shares which differ from the distribution of earnings or profits, as well as the distribution of preemptive rights with respect to common shares, which are carried out as part of a pro rata distribution to all shareholders, will not be subject to Peruvian income tax or withholding taxes.

Capital Gains

Pursuant to Article 6 of the Peruvian income tax law, individuals and domiciled entities in Peru are subject to Peruvian income tax on their worldwide income while non-domiciled entities – including branches, agencies (agencias), and permanent establishment (establecimientos permanentes) of non-domiciled entities – are subject to Peruvian income tax only on their Peruvian source income.

160

Peruvian income tax law provides that income derived from the disposal of securities issued by Peruvian entities is considered Peruvian source income and is therefore subject to income tax. Under current Peruvian income tax law, capital gains resulting from the disposal of American Depositary Receipts (ADRs) that represent shares issued by Peruvian entities are considered Peruvian source income and therefore are subject to Peruvian income tax. Peruvian income tax law also provides that the taxable income resulting from the disposal of securities is equal to the difference between the sale price of the securities (which may not be less than their fair market value) and their tax basis.

Notwithstanding the foregoing, capital gains resulting from the disposal of ADSs or the beneficial interest in ADSs that represent shares issued by a Peruvian entity are not considered Peruvian source income, and therefore are not subject to Peruvian income tax.

In the event ADSs are exchanged into common shares and such common shares are disposed of, capital gains resulting therefrom will be subject to an income tax rate of either 5% or 30%, depending on where the transaction takes place. If the transaction is consummated in Peru, any capital gain will be subject to an income tax rate of 5%; and if the transaction is performed outside of Peru, any capital gain will be subject to a 30% income tax rate. Peruvian income tax law regulations have stated with respect to the transfer of common shares, that transactions are deemed to be consummated in Peru if the common shares are transferred through the Lima Stock Exchange.

From 2016 through December 31 of 2019, pursuant to the Law 30341, capital gains resulting from a transfer of: (i) Common shares and investment shares, (ii) ADRs and Global Depositary Receipts (GDRs), (iii) Exchange Trade Funds (ETF) units that have underlying shares and/or securities representing debt, (iv) representative securities of debt, (v) Certificates of participation in mutual funds for investment in securities, (vi) Certificates of participation in investment Funds in Rent of Real Property (FIRBI) and certificates of participation in Trustee of Securitization for Investment in Rent of Real Estate (FIBRA), and (vii) Negotiable invoices, will be exempt from income tax, provided, however, that the following conditions are met:

With respect to (i), (ii) and convertible bonds:

(a) The transfer must be performed through a centralized trading mechanism supervised by the Securities Market Superintendence;

(b) In any 12-month period, neither the seller or any person related to him must dispose of more than 10% of the total number of common shares issued by the company through one or more simultaneous or successive operations; and

(c) The shares must have a “market presence”, meaning that transactions in respect of those shares for a value exceeding four Tax Units (currently, S/4,200.00 per Tax Unit) shall have occurred in at least 27 business days out of any 180 business day period including the date of the transaction.

With respect to (iii), (iv), (v) and (vi):

(a) The transfer must be performed through a centralized trading mechanism supervised by the Securities Market Superintendence; and

(b) The shares must have a “market presence,” meaning that transactions in respect of those shares for a value exceeding four Tax Units (currently, S/4,200.00) shall have occurred in at least 27 business days out of any 180 business day period including the date of the transaction.

With respect to (vii), the transfer must be performed through a centralized trading mechanism supervised by the Securities Market Superintendence.

161

Any gain resulting from the conversion of ADSs into common shares or common shares into ADSs will not be subject to taxation in Peru.

Likewise, it is important to note that if after applying the exemption, the issuer delisted the securities from the Registry of the Lima Stock Exchange, in whole or in part, in an act or progressively, within the next 12 months after the disposal is made, the exemption that is applied to the securities unlisted is lost.

Any Non-Peruvian Holder who acquires common shares will have the following tax basis: (i) for common shares purchased by the transferor, the acquisition price paid for the shares; (ii) for common shares received by the transferor as a result of a share capital increase because of a capitalization of net profits, the par value of such common shares; (iii) for other common shares received free of any payment, tax basis will be: (x) zero or the cost borne by the transferor, in the case of individuals and (y) the fair market value at the time of the acquisition, in the case of entities; and (iv) for common shares of the same type acquired at different opportunities and at different values, the tax basis will be the weighted average cost. In cases where common shares are sold by Non-Peruvian Holders outside the Lima Stock Exchange, the tax basis must be certified by the Peruvian tax administration prior to the time payment is made to the transferor; otherwise it would not be possible to deduct the tax basis and the 30% Peruvian income tax would apply to the total sale price. Under Peruvian income tax law, tax basis certification is granted by the Peruvian tax authorities within 30 business days after the filing of the corresponding application. If the Peruvian tax authorities do not respond within the abovementioned period, the tax basis calculation will be deemed automatically approved.

In any transaction relating to Peruvian securities through the Lima Stock Exchange, CAVALI will act as withholding agent of the Peruvian income tax. If the purchaser is a resident in Peru and the sale is not performed through the Lima Stock Exchange, the purchaser will act as withholding agent. In other cases, the transferor shall be obliged to self-assess the tax and pay it to the Peruvian tax authorities within the first 12 business days of the month following the transfer.

Other Considerations

No Peruvian estate or gift taxes are imposed on the gratuitous transfer of ADSs or common shares. No stamp, transfer or similar tax applies to any transfer of ADSs or common shares, except for commissions payable by seller and buyer to the Lima Stock Exchange (0.021% of value sold, provided that the Lima Stock Exchange applies a discount of 90% of such commission if stock is included in the Good Corporate Governance Index), fees payable to the Peruvian Securities Commission (0.0135% of value sold, provided that the Peruvian Securities Commission applies a discount of 90% of the abovementioned commission if stock is included in the Good Corporate Governance Index), brokers’ fees (about 0.05% to 0.50% of value sold by legal entities) and value added tax (at the rate of 18%) on commissions and fees. Any investor who sells its common shares on the Lima Stock Exchange will incur these fees and taxes upon purchase and sale of the common shares.

United States Federal Income Tax Considerations

The following summary describes certain United States federal income tax consequences to a United States Holder (as defined below) of the purchase, ownership and disposition of our common shares and ADSs as of the date of this annual report. Except where noted, this summary deals only with common shares and ADSs held as capital assets (generally, property held for investment). As used herein, the term “United States Holder” means a beneficial owner of common shares or ADSs that is for United States federal income tax purposes:

• an individual citizen or resident of the United States;

• a corporation (or other entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

• an estate the income of which is subject to United States federal income taxation regardless of its source; or

162

• a trust if it (i) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust, or (ii) has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person.

This summary does not represent a detailed description of the United States federal income tax consequences applicable to you in light of your particular circumstances and does not address the United States federal income tax consequences applicable to you if you are subject to special treatment under the United States federal income tax laws, including if you are:

• a dealer in securities or currencies;

• a financial institution;

• a regulated investment company;

• a real estate investment trust;

• an insurance company;

• a tax-exempt organization;

• a person holding our common shares or ADSs as part of a hedging, integrated or conversion transaction, a constructive sale or a straddle;

• a trader in securities that has elected the mark-to-market method of accounting for your securities;

• a person liable for alternative minimum tax;

• a person who owns or is deemed to own 10% or more of our stock (by vote or value);

• a person required to accelerate the recognition of any item of gross income with respect to our common shares or ADSs as a result of such income being recognized on an applicable financial statement;

• a partnership or other pass-through entity for United States federal income tax purposes; or

• a person whose “functional currency” is not the U.S. dollar.

The discussion below is based upon the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and regulations, rulings and judicial decisions thereunder as of the date hereof, and such authorities may be replaced, revoked or modified so as to result in United States federal income tax consequences different from those discussed below. There is currently no income tax treaty between the United States and Peru that would provide for United States federal income tax consequences different than the consequences under the foregoing authorities. In addition, this summary is based, in part, upon representations made by the depositary to us and assumes that the deposit agreement, and all other related agreements, will be performed in accordance with their terms.

If a partnership (or other entity or arrangement treated as a partnership for United States federal income tax purposes) holds our common shares or ADSs, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding our common shares or ADSs, you should consult your tax advisors.

This summary does not address the effects of the Medicare tax on net investment income or other United States income tax consequences such as United States federal estate or gift tax consequences, and does not address the effects of any state, local or non-United States tax laws. If you are considering the purchase, ownership or disposition of our common shares or ADSs, you should consult your own tax advisors concerning the United States federal income tax consequences to you in light of your particular situation as well as any consequences arising under the laws of any other taxing jurisdiction.

163

ADSs

If you hold ADSs, for United States federal income tax purposes, you generally will be treated as the owner of the underlying common shares that are represented by such ADSs. Accordingly, deposits or withdrawals of common shares for ADSs will not be subject to United States federal income tax.

Taxation of Dividends

The gross amount of distributions, other than certain pro rata distributions of common shares, on the ADSs or common shares (including amounts withheld to reflect Peruvian withholding taxes) will be taxable as dividends, to the extent paid out of our current or accumulated earnings and profits, as determined under United States federal income tax principles.

To the extent that the amount of any distribution (including amounts withheld to reflect Peruvian withholding taxes) exceeds our current and accumulated earnings and profits for a taxable year, as determined under United States federal income tax principles, the distribution will first be treated as a tax-free return of capital, causing a reduction in the adjusted basis of the ADSs or common shares, and the balance in excess of adjusted basis will be taxed as capital gain recognized on a sale or exchange. However, we do not expect to keep earnings and profits in accordance with United States federal income tax principles. Therefore, you should expect that a distribution will generally be treated as a dividend. Such dividends (including any withheld taxes) will be includable in your gross income as ordinary income on the day actually or constructively received by you, in the case of the common shares, or by the depositary, in the case of ADSs. Such dividends will not be eligible for the dividends received deduction allowed to corporations under the Code.

With respect to non-corporate United States Holders, certain dividends received from a qualified foreign corporation may be subject to reduced rates of taxation. A non-United States corporation is treated as a qualified foreign corporation with respect to dividends received from that corporation on common shares (or ADSs backed by such shares) that are readily tradable on an established securities market in the United States. United States Treasury Department guidance indicates that our ADSs, which are listed on the NYSE, will be considered readily tradable on an established securities market in the United States. Based on existing guidance, it is not entirely clear whether our common shares will be considered readily tradable on an established securities market in the United States because only the ADSs, not the underlying common shares, are listed on a securities market in the United States. We believe that dividends we pay on our common shares that are represented by ADSs, but not our common shares that are not so represented, will meet such conditions required for the reduced tax rates. There can be no assurance that our ADSs will be considered readily tradable on an established securities market in later years. Non-corporate United States Holders that do not meet a minimum holding period requirement during which they are not protected from the risk of loss or that elect to treat the dividend income as “investment income” pursuant to Section 163(d)(4) of the Code will not be eligible for the reduced rates of taxation regardless of our status as a qualified foreign corporation. In addition, the rate reduction will not apply to dividends if the recipient of a dividend is obligated to make related payments with respect to positions in substantially similar or related property. This disallowance applies even if the minimum holding period has been met. You should consult your own tax advisors regarding the application of these rules given your particular circumstances.

The amount of any dividend paid in soles will equal the U.S. dollar value of the soles received, calculated by reference to the exchange rate in effect on the date the dividend is actually or constructively received by you, in the case of the common shares, or by the depositary, in the case of ADSs, regardless of whether the soles are converted into U.S. dollars at that time. If the soles received as a dividend are converted into U.S. dollars on the date they are received, you generally will not be required to recognize foreign currency gain or loss in respect of the dividend income. If the soles received as a dividend are not converted into U.S. dollars on the date of receipt, you will have a tax basis in the soles equal to their U.S. dollar value on the date of receipt. Any gain or loss realized on a subsequent conversion or other disposition of the soles will be treated as United States source ordinary income or loss.

164

Subject to certain conditions and limitations, Peruvian withholding taxes on dividends may be treated as foreign taxes eligible for credit against your United States federal income tax liability. For purposes of calculating the foreign tax credit, dividends paid on the ADSs or common shares will be treated as foreign source income and will generally constitute passive category income. However, in certain circumstances, if you have held the ADSs or common shares for less than a specified minimum period during which you are not protected from risk of loss, or are obligated to make payments related to the dividends, you will not be allowed a foreign tax credit for any Peruvian withholding taxes imposed on dividends paid on the ADSs or common shares. If you do not elect to claim a United States foreign tax credit, you may instead claim a deduction for Peruvian income tax withheld, but only for a taxable year in which you elect to do so with respect to all foreign income taxes paid or accrued in such taxable year. The rules governing the foreign tax credit are complex. You are urged to consult your tax advisors regarding the availability of the foreign tax credit under your particular circumstances.

Taxation of Capital Gains

For United States federal income tax purposes, you will recognize taxable gain or loss on any sale or other disposition of ADSs or common shares in an amount equal to the difference between the amount realized for the ADSs or common shares and your tax basis in the ADSs or common shares, in each case as determined in U.S. dollars. Such gain or loss will generally be capital gain or loss. Capital gains of non-corporate United States Holders derived with respect to capital assets held for more than one year are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations.

If a Peruvian income tax is withheld on the sale or other disposition of our ADSs or common shares, your amount realized will include the gross amount of the proceeds of that sale or other disposition before deduction of the Peruvian income tax. See “—Peruvian Tax Considerations—Capital Gains” for a description of when a sale or other disposition of our ADSs or common shares may be subject to taxation by Peru. Any gain or loss recognized by you will generally be treated as United States source gain or loss for foreign tax credit purposes. Consequently, in the case of gain from the disposition of ADSs or common shares that is subject to Peruvian income tax, you may not be able to benefit from the foreign tax credit for that Peruvian income tax (i.e., because the gain from the disposition would be United States source), unless you can apply the credit (subject to applicable limitations) against United States federal income tax payable on other income from foreign sources. Alternatively, you may take a deduction for the Peruvian income tax if you do not take a credit for any foreign taxes paid or accrued during the taxable year. You are urged to consult your tax advisors regarding the tax consequences if Peruvian income tax is imposed on a disposition of ADSs or common shares, including the availability of the foreign tax credit under your particular circumstances.

Passive Foreign Investment Company

We do not believe that we are, for United States federal income tax purposes, a passive foreign investment company (a “PFIC”), and we expect to operate in such a manner so as not to become a PFIC. If, however, we are or become a PFIC, you could be subject to additional United States federal income taxes on gain recognized with respect to the ADSs or common shares and on certain distributions, plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Non-corporate United States Holders will not be eligible for reduced rates of taxation on any dividends received from us (as discussed above under “—Taxation of Dividends”) if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.

Information Reporting and Backup Withholding

In general, information reporting will apply to dividends in respect of our ADSs or common shares and the proceeds from the sale or other disposition of our ADSs or common shares that are paid to you within the United States (and in certain cases, outside the United States), unless you are an exempt recipient. Backup withholding may apply to such payments if you fail to provide a taxpayer identification number or certification of exempt status or fail to report in full dividend and interest income.

Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your United States federal income tax liability provided the required information is furnished to the Internal Revenue Service in a timely manner.

165

The above description is not intended to constitute a complete analysis of all tax consequences relating to the acquisition, ownership or disposition of our ADSs or common shares. You should consult your own tax advisors concerning the overall tax consequences to you, including the consequences under laws other than United States federal income tax laws, of an investment in our ADSs or common shares.

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts

Not applicable.

H. Documents on Display

We are subject to the informational requirements of the U.S. Securities Exchange Act of 1934, or the Exchange Act. Accordingly, we are required to submit reports and other information to the SEC, including annual reports on Form 20-F and reports on Form 6-K. In addition, the SEC maintains an Internet website at http://www.sec.gov, from which you can electronically access these materials.

As a foreign private issuer, we are required to file with the SEC annual reports on Form 20-F, but we are not subject to the same disclosure requirements as a domestic U.S. registrant under the Exchange Act. For example, we are not required to prepare and issue quarterly reports. However, we have furnished, and intend to continue to furnish, our shareholders with quarterly reports containing unaudited financial data for the first three quarters of each fiscal year. In addition, as a foreign issuer, we are not subject to the proxy rules under Section 14 of the Exchange Act and our officers and directors are subject to Section 16 of the Exchange Act relating to insider short-swing profit disclosure and recovery regime.

We send the depositary a copy of all notices that we give relating to meetings of our shareholders or to distributions to shareholders or the offering of rights and a copy of any other report or communication that we make generally available to our shareholders. The depositary makes all these notices, reports and communications that it receives from us available for inspection by registered holders of ADSs at its office. The depositary mails copies of those notices, reports and communications to you if we ask the depositary to do so and furnish sufficient copies of materials for that purpose.

We file financial statements and other periodic reports with the Peruvian Securities Commission in Peru. Issuers of securities registered with the Peruvian Securities Commission are required to disclose material information relating to the issuer. Pursuant to the Securities Market Law and relevant regulations enacted thereunder, all material information in connection with the issuer of registered securities, its activities or securities issued or secured by such issuer which may influence the liquidity or price of such securities must be disclosed. Accordingly, issuers must file with the Peruvian Securities Commission mainly two types of information: (a) financial information, including unaudited interim financial statements on a quarterly basis (which are not required to be subject to limited review), and audited annual consolidated financial statements on an annual basis, and (b) material information relating to the issuer and its activities that may significantly affect the price, offering or negotiation of the issued securities, and in general, all the information that may be relevant for investors to be able to make investment decisions.

I. Subsidiary Information

See the notes 2.2 and 6 to our audited annual consolidated financial statements included in this annual report for a description of our subsidiaries.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to a number of market risks arising from our normal business activities, including the possibility that changes in currency exchange rates or interest rates will adversely affect future cash flows and profit or the value of our financial assets and liabilities. From time to time, we enter into derivative transactions to hedge against foreign currencies and interest rate fluctuations. For further information regarding our market risk, see note 4 to our audited annual consolidated financial statements included in this annual report.

166

Exchange Rate Risk

We are exposed to market risk associated with changes in foreign currency exchange rates. Our revenues and costs, and our assets and liabilities, are denominated in soles, U.S. dollars, Chilean pesos and, to a lesser extent, other currencies. In 2019, we estimate that 52%, 35% and 13% of our revenues were denominated in soles, U.S. dollars and other currencies (principally Chilean pesos), respectively, while 64%, 21% and 15% of our cost of sales during the year were denominated in soles, U.S. dollars and other currencies. In addition, as of December 31, 2019, 70%, 27% and 3% of our total debt was denominated in soles, U.S. dollars and other currencies, respectively. If, at December 31, 2019, the sol had strengthened/weakened by 2% against the U.S. dollar, with all other variables remaining constant, or pre-tax profit for the year would have increased/decreased by S/9.3 million.

Interest Rate Risk

We may from time to time incur variable interest rate indebtedness, and accordingly our financial expenses are affected by changes in interest rates. Based upon our indebtedness at December 31, 2019, and taking into account our interest rate derivative instruments, a change in interest rates of 5% (or 500 basis points) would impact our net profit by S/0.01 million annually.

Commodity Price Risk

We are exposed to market risk associated with changes in commodity prices, primarily for oil, steel and cement, which in aggregate represented a majority of our total input cost in 2019. We do not have long-term contracts for the supply of these key inputs. Based upon our consumption of these inputs during 2019, a 10% increase/decrease in the prices of each of oil, steel and cement would have increased/decreased our costs of sales by S/0.994 million, S/6.714 million and S/8.431 million, respectively. However, based on our production of oil during 2019, a 10% increase/decrease in the price of oil would have increased/decreased our revenues by S/28.8 million and S/30.9 million, respectively.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

A. Debt Securities

Not applicable.

B. Warrants and Rights

Not applicable.

C. Other Securities

Not applicable.

D. American Depositary Shares

Fees and Expenses

The depositary may charge each person to whom ADSs are issued, including, without limitation, issuances against deposits of common shares, issuances in respect of common share distributions, rights and other distributions, issuances pursuant to a stock dividend or stock split declared by us or issuances pursuant to a merger, exchange of securities or any other transaction or event affecting the ADSs or deposited securities, and each person surrendering ADSs for withdrawal of deposited securities or whose ADRs are cancelled or reduced for any other reason, US$5.00 or less for each 100 ADSs (or any portion thereof) issued, delivered, reduced, cancelled or surrendered, as the case may be. The depositary may sell (by public or private sale) sufficient securities and property received in respect of a common share distribution, rights and/or other distribution prior to such deposit to pay such charge.

167

The following additional charges shall be incurred by the ADR holders, by any party depositing or withdrawing common shares or by any party surrendering ADSs or to whom ADSs are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by us or an exchange of stock regarding the ADRs or the deposited securities or a distribution of ADSs), whichever is applicable:

• a fee of US$1.50 per ADR or ADRs for transfers of certificated or direct registration ADRs;

• a fee of US$0.05 or less per ADS for any cash distribution made pursuant to the deposit agreement;

• a fee of US$0.05 or less per ADS per calendar year (or portion thereof) for services performed by the depositary in administering the ADRs (which fee may be charged on a periodic basis during each calendar year and shall be assessed against holders of ADRs as of the record date or record dates set by the depositary during each calendar year and shall be payable in the manner described in the next succeeding provision);

• a fee for the reimbursement of such fees, charges and expenses as are incurred by the depositary and/or any of the depositary’s agents (including, without limitation, the custodian and expenses incurred on behalf of holders in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in connection with the servicing of the common shares or other deposited securities, the sale of securities, the delivery of deposited securities or otherwise in connection with the depositary’s or the custodian’s compliance with applicable law, rule or regulation (which charge shall be assessed on a proportionate basis against holders as of the record date or dates set by the depositary and shall be payable at the sole discretion of the depositary by billing such holders or by deducting such charge from one or more cash dividends or other cash distributions);

• a fee for the distribution or sale of securities pursuant to paragraph 10 of the deposit agreement, such fee being in an amount equal to the US$0.05 per ADS issuance fee for the execution and delivery of ADSs which would have been charged as a result of the deposit of such securities (treating all such securities as if they were common shares) but which securities or the net cash proceeds from the sale thereof are instead distributed by the depositary to those holders entitled thereto;

• stock transfer or other taxes and other governmental charges;

• cable and facsimile transmission and delivery charges incurred at your request in connection with the deposit or delivery of common shares;

• transfer or registration fees for the registration of transfer of deposited securities on any applicable register in connection with the deposit or withdrawal of deposited securities; and

• expenses of the depositary in connection with the conversion of foreign currency into U.S. dollars.

We will pay all other charges and expenses of the depositary and any agent of the depositary (except the custodian) pursuant to agreements from time to time between us and the depositary. The charges described above may be amended from time to time by agreement between us and the depositary.

Our depositary has agreed to reimburse us for certain expenses we incur that are related to establishment and maintenance of the ADR program, including investor relations expenses and exchange application and listing fees. The amounts of reimbursements available to us are not based upon the amounts of fees the depositary collects from investors. The depositary collects its fees for issuance and cancellation of ADSs directly from investors depositing common shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting on their behalf. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed

168

or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions, or by directly billing investors, or by charging the book-entry system accounts of participants acting for them. The depositary will generally set off the amounts owing from distributions made to holders of ADSs. If, however, no distribution exists and payment owing is not timely received by the depositary, the depositary may refuse to provide any further services to holders that have not paid those fees and expenses owing until such fees and expenses have been paid. At the discretion of the depositary, all fees and charges owing under the deposit agreement are due in advance and/or when declared owing by the depositary.

During 2019, the depositary reimbursed us for expenses in an aggregate amount of US$222,667 (S/738,588).

169

PART II.

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

CS Peru Infrastructure Loan

On November 19, 2019, a filing of a preventive bankruptcy proceedings by the company’s subsidiary Adexus triggered an event of default under the CS Peru Infrastructure Loan. On February 28, 2020, the company and the initial lender signed an amendment, waiver and consent in respect of this event of default, in consideration for a prepayment by the company of US$10 million, together with accrued interest and a make-whole premium. The amendment also amended the definition of ‘Consolidated EBITDA’ set forth in the agreement to exclude non-cash non-recurring events and amended the list of investigations set forth on Schedule 6.25 thereto.

Financial Stability Framework Agreement

During 2019, our construction subsidiary GyM was under a continuing default under the Financial Stability Framework Agreement with respect to its failure to comply with certain ratios between Tranche A (client invoices) and Tranche B (client provisions). No event of default was formally notified to GyM by the lenders, and GyM procured a waiver from the lenders in July 2019.

GSP Bridge Loan and New Term Loan

With the termination of the GSP gas pipeline concession, our proportional guarantee under the GSP bridge loan became due. As of December 31, 2017, there was US$72.5 million (S/235.2 million) of principal amount outstanding under our corporate guarantee. On June 27, 2017 we entered into a new US$78.7 million (S/264.8 million) term loan with Natixis, BBVA, SMBC and MUFJ, the proceeds of which were used to prepay GSP bridge loan.The company was in default during January of 2019 due to its failure to make payment on June 27, 2018 of 40% of the amounts outstanding under the term loan. The company received a waiver from the lenders on January 31, 2019, concurrent with which the company repaid the amounts that were overdue (US$16.2 million). The term loan was repaid in full in June 2019.

For more information, see “Item 5.B. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Indebtedness.”

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Material Modifications to the Rights of Security Holders

None.

Use of Proceeds

On November 6, 2018, our company’s general meeting of shareholders and board of directors approved an offering and sale of our company’s common shares pursuant to a private placement. In December 2018, our company issued and sold a total of 69,380,402 common shares, to certain of our company’s existing shareholders that exercised preemptive rights in accordance with Peruvian law and pursuant to a private placement. On April 2, 2019, our company issued and sold 142,483,633 common shares pursuant to the private placement, of which: (i) 55,291,877 shares were paid in full and (ii) 87,191,786 shares were paid 50% on such date with 50% paid on June 1, 2019. In total, our company issued and sold 211,864,065 common shares with the proceeds used to reduce debt, to pay our vendors and for working capital of one of our company’s subsidiaries.

170

ITEM 15. CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES

A. Disclosure Controls and Procedures

Management, with the participation of our company’s Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2019, our disclosure controls and procedures were not effective as a result of the material weaknesses in internal control over financial reporting described below.

B. Management’s Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting for our company as such term is defined by Exchange Act rules 13(a)-15(f) and 15(d)-15(f). In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the U.S. Sarbanes-Oxley Act of 2002 (“SOX”), management has conducted an assessment, including testing, using the criteria in Internal Control-Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Our company’s system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted IFRS accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

We have established a continuous testing process throughout the year. From this assessment of the effectiveness of our internal control over financial reporting as of December 31, 2019, we have identified certain material weaknesses. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual and interim consolidated financial statements will not be prevented or detected on a timely basis. The material weaknesses identified are described below:

• deficiencies in the operational effectiveness of controls over SOX compliance, including (1) inadequate monitoring of entities that provide services to companies in our group and may have an impact in our financial reporting, (2) the lack of procedures or implementation of controls for the assurance of the completeness and accuracy of key reports and (3) the absence of self-assessment by controls’ owners;

• deficiencies in the design and operational effectiveness of the controls established in the accounting closing process concerning the preparation and review of the annual and interim consolidated financial statements, including (1) inadequate supporting documentation for significant transactions prior to their registration in accounting records, (2) late adoption of International Financial Reporting Standards affecting our interim consolidated financial statements, (3) delay in undertaking the evaluations required under IFRS 9 (Financial Instruments) and (4) failure to finalize a manual for accounting policies for all subsidiaries and our group as a whole; and

• deficiencies in (1) the implementation of our new SAP-based payroll system for employees established in 2019 and (2) the segregation of duties for both our new employee payroll system and our existing construction workers’ payroll system.

171

Conclusion

The material weaknesses described above did not result in adjustments to our annual consolidated financial statements. However, these material weaknesses could result in misstatements in our financial results and disclosures, which could result in a material misstatement to our annual consolidated financial statements not being prevented or detected. Because of these material weaknesses, management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2019, based on criteria in Internal Control-Integrated Framework (2013) issued by the COSO.

Moore Assurance S.A.S. (a member firm of Moore Global Network Limited), an independent registered public accounting firm, which has audited and reported on the consolidated financial statements as of and for the year ended December 31, 2019 contained in this annual report on Form 20-F, has issued an attestation report on our internal control over financial reporting as of December 31, 2019.

Remediation Plan

We are taking remedial actions to address the material weaknesses that have been identified with respect to our internal control over financial reporting.

We continue to work on the remediation of our deficiencies with respect to the operational effectiveness of controls over SOX compliance. We have established a remediation plan for the deficiencies detected in 2019 which includes (1) monitoring of services provided by third parties, in particular IT services, in order to ensure compliance with applicable accounting rules and company policies, (2) designing and implementing controls necessary to ensure the integrity and accuracy of key reports used by owners and (3) implementing self-assessment controls for our processes.

With respect to the deficiencies detected in 2019 concerning the design and operational effectiveness of the controls established in the accounting closing process, we will finalize our accounting policies and procedures manual to ensure the (1) timely evaluation of the impact of new accounting rules, (2) timely adoption of new accounting rules and (3) accurate recording of our operations.

In the first quarter of 2020, we finalized the implementation of segregation of duties for our new employee payroll system (SAP) and will be testing such controls throughout the year. We are working to implement segregation of duties for our existing construction worker payroll system.

Furthermore, we will continue to monitor and assess our remediation activities to address the material weaknesses described above through remediation as soon as practicable. The implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting described above.

The process of designing and implementing an effective reporting system is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to devote significant resources to maintain a financial reporting system that is adequate to satisfy our reporting obligations. See “Item 3. Key Information— D. Risk Factors — We have identified material weaknesses in our internal control over financial reporting, and if we cannot maintain effective internal controls or provide reliable financial and other information in the future, investors may lose confidence in the reliability of our consolidated financial statements, which could result in a decrease in the value of our ADSs.” If we fail to implement and maintain an effective system of internal control, we may be unable to accurately report our results of operations or prevent fraud or fail to meet our reporting obligations, and investor confidence and the market price of our ADSs may be materially and adversely affected.

172

C. Attestation Report of the Registered Public Accounting Firm

See Item 18. Financial Statements.

D. Changes in Internal Control Over Financial Reporting

During 2019, the company made changes to its internal control over financing reporting to address material weaknesses identified during 2018. The company continued implementing its remedial plan as described in Item 15.B. of the annual report for the 2018 fiscal year. Specifically, the company addressed material weaknesses in its SOX compliance, risk management system, controls over segregation of duties and revenue recognition process, as follows:

• We determined the subsidiaries to be included in the scope of SOX testing, completed the implementation of controls over such subsidiaries and performed the testing of these controls in design and effectiveness over financial reporting. During 2019, the company undertook a plan to correct the deficiencies in operational effectiveness of controls over SOX compliance in the subsidiaries who were in the scope of SOX testing, including the implementation and testing of controls over such subsidiaries to comply with the SOX regulation. During 2019, we were able to partially remediate the deficiencies in operational effectiveness of controls over SOX compliance identified and plan to remediate our remaining deficiencies during 2020, as outlined in our remediation plan above.

• We prepared and initiated the implementation of a company risk manual that (1) formalizes our risk appetite limits and their management and (2) includes a methodology and process for identification, evaluation and quantification of risks, a continuous improvement plan and a monitoring and reporting process.

• We revised our controls over the accounting process to ensure that financial statements are assessed, that supporting documentation of accounting entries is provided, that there is a correct segregation of duties between preparation and approval of accounting entries.. As described in Item 15.B above, we have still identified deficiencies over the accounting closing process which we will address in our 2020 remediation plan.

• We also completed the assignment of profiles for registration of transactions in the Oracle system, to remediate the material weakness that we identified at the end of 2018.

• We revised our revenue recognition process to ensure that the criteria for, and the documentation supporting, the recognition of revenue and the determination of related provisions, including construction contract revenues and contingent revenues, is applied correctly.

During 2019, the company, through its senior management, continued to implement programs to strengthen ethics, compliance and the tone of the top of the organization affecting how the organization performs risk management, financial analysis, accounting and financial reporting. These activities included: ethics training programs, which were completed by approximately 87% of employees; conflicts of interest declarations required of all employees; strengthening the hiring process; continuation of a communication program for all employees with respect to the company’s compliance policies; continued application of a due diligence program to third parties (partners and suppliers) and employees as part of our fraud risk program; and enactment of a plan to enhance the new internal control system across the company, the implementation of which is ongoing, including an enhanced risk management process that identifies, mitigates, monitors and reports key risks at various levels in the business.

During 2019, the company continued the review of its processes to identify deficiencies in controls to address risks related to material misstatements. These processes included: accounting closing, contract documentation, segregation of duties, project management, and new business engagement. Of the five material weaknesses identified in 2018, the company was able to partially remediate such deficiencies and in 2019, three out of such five material weaknesses were no longer classified as material weaknesses. We are in the process of implementing the remediation plan described in Item 15.B. above, which is expected to be completed during 2020.

173

ITEM 16. [RESERVED]

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

Mr. Manuel del Río qualifies as an “audit committee financial expert” and is independent under the Exchange Act.

ITEM 16B. CODE OF BUSINESS CONDUCT AND ETHICS

We are committed to responsible, honest, transparent and ethical conduct. Our management system enables us to communicate our corporate values and principles to all levels of the organization, offers a confidential reporting mechanism (canal ético), and has a governance structure, independent from management, to investigate and remedy potential breaches of our code.

We have adopted a code of business conduct and it applies to our directors, officers and employees. Our code of business conduct is available on our website www.granaymontero.com.pe. Information on our website is not incorporated by reference in this annual report.

If we make any substantive amendment to the code of business conduct or if we grant any waiver, including any implicit waiver, from a provision of the code of business conduct that applies to our chief executive officer, chief financial officer or controller, we will disclose the nature of such amendment or waiver in our website or in our next Form 20-F to be filed with the SEC to the extent required under applicable rules. During the year ended December 31, 2019, no such amendment or waiver was granted.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit and Non-Audit Fees

The following table sets forth the fees billed to us by our current independent registered public accounting firm, Moore Assurance S.A.S. (a member firm of Moore Global Network Limited), in connection with its audit of our annual consolidated financial statements for the fiscal years ended December 31, 2018 and 2019, which are included in this report.

174

	For the year ended December 31,
	2018		2019
	(in thousands of S/)
Audit fees		5,406		4,257
Audit-related fees		—		—
Tax fees		—		—
All other fees		—		—
Total fees		5,406		4,257

Audit fees in the table above are the aggregate fees billed and billable by our independent auditor in connection with the audit of, or audit procedures in connection with, our annual consolidated financial statements and review of our internal controls.

Our Audit and Process Committee is responsible for the oversight of the independent auditors and has established pre-approval procedures for the engagement of our registered public accounting firm for audit and non-audit services. Services can only be contracted if they are approved by the Audit and Process Committee, they comply with the restrictions provided under applicable rules and they do not jeopardize the independence of our auditors. All services provided by our current independent auditor for our fiscal years ended December 31, 2018 and 2019 were pre-approved by our Audit and Process Committee.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Not applicable.

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16G. CORPORATE GOVERNANCE

We are a “foreign private issuer” within the meaning of the NYSE corporate governance standards. Under NYSE rules, a foreign private issuer may elect to comply with the practices of its home country and not to comply with certain corporate governance requirements applicable to U.S. companies with securities listed on the exchange.

We currently follow certain Peruvian practices concerning corporate governance and intend to continue to do so. There are significant differences in the Peruvian corporate governance practices as compared to those followed by United States domestic companies under the NYSE’s listing standards.

The NYSE listing standards provide that the board of directors of a U.S. listed company must have a majority of independent directors. Under Peruvian corporate governance practices, a Peruvian company is not required to have a majority of independent members on its board of directors. However we currently have a majority of independent directors on our board in accordance with NYSE independence standards. Our Audit and Process Committee is comprised of independent directors under SEC rules applicable to foreign private issuers. Additionally, our Human Resource Management Committee is currently comprised of independent directors, while our Investment Committee and our Risk, Compliance and Sustainability Committee are currently comprised of a majority of independent directors, in each case under NYSE independence standards. Our Human Resource Management Committee is not the equivalent of, or wholly comparable to, a U.S. compensation committee.

175

The listing standards for the NYSE also require that U.S. listed companies have a nominating/corporate governance committee and a compensation committee (in addition to an audit committee). Each of these committees must consist solely of independent directors and must have a written charter that addresses certain matters specified in the listing standards. Under Peruvian law, a Peruvian company may, but is not required to, form such committees, which may be composed partially or entirely of non-independent directors. Accordingly, we do not have a nominating/corporate governance committee and a compensation committee.

In addition, NYSE rules require the independent non-executive directors of U.S. listed companies to meet on a regular basis without management being present. There is no similar requirement under Peruvian law, accordingly, we do not have such meetings.

The NYSE’s listing standards also require U.S. listed companies to adopt and disclose corporate governance guidelines. In July 2002, the Peruvian Securities Commission and a committee comprised of regulatory agencies and associations prepared and published a list of suggested non-mandatory corporate governance guidelines called the “Principles of Good Governance for Peruvian Companies.” These principles are disclosed on the Peruvian Securities Commission web page http://www.smv.gob.pe and the Lima Stock Exchange web page http://www.bvl.com.pe. Although we have implemented a number of these measures and have been selected to form part of the Best Corporate Governance Practices Index of the Lima Stock Exchange, we are not required to comply with the referred corporate governance guidelines by law or regulation.

ITEM 16H. MINE SAFETY DISCLOSURE

Not applicable.

ITEM 17. FINANCIAL STATEMENTS

Not applicable.

ITEM 18. FINANCIAL STATEMENTS

See our consolidated financial statements beginning at page F-1 of this annual report. See also Oil and Gas Supplementary Schedules beginning on page S-1.

ITEM 19. EXHIBITS

The agreements and other documents filed as exhibits to this annual report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and for the benefit of the other parties to the agreements and they may not describe the actual state of affairs as of the date they were made or at any other time.

Exhibit Number	Description
1.01*	By-Laws of the Registrant, as currently in effect
2.01**	Registrant’s Form of American Depositary Receipt
2.02**	Deposit Agreement, dated as of December  31, 2018, among the Registrant, The Bank of New York Mellon, as depositary, and all owners and holders from time to time of American depositary shares issued thereunder
8.01	Subsidiaries of the Registrant
10.01	Credit Agreement, dated as of July 31, 2019, by and between Graña y Montero, as borrower, and CS Peru Infrastructure Holdings LLC, as initial lender.
10.01.1	Amendment, Waiver and Consent, dated as of February 28, 2020, by and between Graña y Montero, as borrower, and CS Peru Infrastructure Holdings LLC, as initial lender.

176

Exhibit Number	Description
10.02***	English translation of Financial Stability Framework Agreement, dated as of July  31, 2017, by and among, inter alia, Graña y Montero, as borrower, and Scotiabank Perú S.A.A., Banco Internacional del Perú S.A.A., BBVA Banco Continental, Banco de Crédito del Perú, Citibank del Perú S.A. and Citibank, N.A., as lenders.
10.03***	English translation of Section 20 of Concession Agreement, dated as of July  22, 2014, by and among the Peruvian Ministry of Energy and Mines, as contracting authority and the concessionaire party thereto.
10.04***	English translation of Memorandum of Understanding, dated as of September  26, 2017, by and among Graña y Montero, Negocios de Gas S.A., Enagás S.A., Odebrecht S.A., and Inversiones en Infraestructura de Transporte por Ductos S.A.C.
10.04.1***	English translation of Rights Subordination Agreement, dated as of April  29, 2016, by and among Odebrecht Latinvest Peru Ductos, S.A., Odebrecht S.A., Enagás, S.A., Graña y Montero, Negocios de Gas S.A., Inversiones en Infraestructura de Transporte por Ductos S.A.C., and Gasoducto Sur Peruano S.A.
10.04.1.1***	English translation of Addendum No. 1, dated as of June  24, 2016, to the Rights Subordination Agreement, dated as of April  29, 2016, by and among, inter alia, Odebrecht Latinvest Peru Ductos, S.A., Odebrecht S.A., Enagás, S.A., Graña y Montero, GyM S.A., Negocios de Gas S.A., Inversiones en Infraestructura de Transporte por Ductos S.A.C., Gasoducto Sur Peruano S.A., Odebrecht Perú Ingeniería y Construcción S.A.C., and Constructora Norberto Odebrecht S.A., Sucursal del Perú.
10.04.1.2***	English translation of Addendum No. 2 and Assignment Agreement, dated as of August  11, 2016, to the Rights Subordination Agreement, dated as of April  29, 2016, by and among, inter alia, Odebrecht Latinvest Peru Ductos, S.A., Odebrecht S.A., Enagás, S.A., Graña y Montero, GyM S.A., Negocios de Gas S.A., Inversiones en Infraestructura de Transporte por Ductos S.A.C., Gasoducto Sur Peruano S.A., Odebrecht Perú Ingeniería y Construcción S.A.C., and Constructora Norberto Odebrecht S.A., Sucursal del Perú.
10.04.1.3***	English translation of Modification to Addendum No. 2 and Assignment Agreement, dated as of October  25, 2016, to the Rights Subordination Agreement, dated as of April  29, 2016, by and among, inter alia, Odebrecht Latinvest Peru Ductos, S.A., Odebrecht S.A., Enagás, S.A., Graña y Montero, GyM S.A., Negocios de Gas S.A., Inversiones en Infraestructura de Transporte por Ductos S.A.C., Gasoducto Sur Peruano S.A., Odebrecht Perú Ingeniería y Construcción S.A.C., and Constructora Norberto Odebrecht S.A., Sucursal del Perú.
10.05	Description of Securities Registered Pursuant to Section 12 of the Exchange Act
12.01	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
12.02	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
13.01****	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
13.02****	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
101. INS	XBRL Instance Document
101. SCH	XBRL Taxonomy Extension Schema Document
101. CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101. DEF	XBRL Taxonomy Extension Definition Linkbase Document
101. LAB	XBRL Taxonomy Extension Label Linkbase Document
101. PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Incorporated herein by reference to exhibit 1.01 of the Registrant’s Form 20-F (File No. 333-172855) filed with the SEC on April 30, 2014.

** Incorporated herein by reference to exhibit 1 to the Registrant’s registration statement on Form F-6 (File No. 333-228727) filed with the SEC on December 10, 2018.

*** Incorporated herein by reference to the Registrant’s Form 20-F (File No. 333-172855) filed with the SEC on May 15, 2018.

**** This certification will not be deemed “filed” for purposes of Section 18 of the Exchange Act (15 U.S.C. §78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.

177

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on Form 20-F on its behalf.

GRAÑA Y MONTERO S.A.A.
By:	/s/ Luis Francisco Díaz Olivero
Name:	Luis Francisco Díaz Olivero
Title:	Chief Executive Officer
By:	/s/ Monica Miloslavich
Name:	Monica Miloslavich
Title:	Chief Financial Officer

Date: June 12, 2020

(All amounts expressed in thousands of S/ unless otherwise stated)

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2017, 2018 AND 2019

CONTENTS	Page
Report of Independent Registered Public Accounting Firm		F-1
Consolidated Statement of Financial Position		F-4
Consolidated Statement of Income		F-5
Consolidated Statement of Comprehensive Income		F-6
Consolidated Statement of Changes in Equity		F-7
Consolidated Statement of Cash Flows		F-8
Notes to the Consolidated Financial Statements		F-9 – F-116

S/	=	Peruvian Sol
US$	=	United States dollar

OPINION OF THE INDEPENDENT AUDITORS

To the Shareholders and members of the Board of Directors

Graña y Montero S.A.A.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Graña y Montero S.A.A. and its subsidiaries

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statements of financial position of Graña y Montero S.A.A. and its subsidiaries (the “Company”) as of December 31, 2019 and 2018 and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2019, and the related notes. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2019, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also, in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) because the following material weaknesses in internal control over financial reporting existed as of that date:

- Deficiencies in the design and operational effectiveness of controls in the payroll process with respect to the data migration and implementation of the new payroll systems and segregation of duties in such systems.

- Deficiencies in the design and operational effectiveness of the controls established in the accounting closing process with respect to the preparation and review of the annual and interim financial statements, including the lack of supporting documentation for significant transactions prior to reflecting in accounting records, late adoption of applicable accounting rules affecting our interim consolidated financial statements, delay in undertaking evaluations required under IFRS 9 (Financial Instruments) and failure to finalize a manual for accounting policies for all subsidiaries and the group as a whole.

- Deficiencies in the operational effectiveness of controls over SOX compliance.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses referred to above are described in the Management Report on Internal Control over Financial Reporting appearing under Item 15. We considered these material weaknesses in determining the nature, timing, and extent of audit tests applied in our audit of the 2019 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements.

F-1

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Emphasis of Certain Matters

As discussed in Note 1 to the financial statements, Graña y Montero S.A.A. has been included as a responsible third party in the investigations related to the IIRSA case and has an exposure to the preliminary investigation process conducted in relation to the Gasoducto Sur Peruano project; GyM S.A. (a subsidiary of Graña y Montero S.A.A.) has been included as a responsible third party in IIRSA cases, the Electric Train Construction and Construction Club and has also been included in a Sanctioning Administrative Process by a Peruvian regulatory entity for the existence of a alleged cartel called the Construction Club. Likewise, Concar S.A. (a subsidiary of Graña y Montero S.A.A.) has been required to be included in the investigation process of the Construction Club. The aforementioned Note 1 also describes that the Company signed an agreement of understanding with the Peruvian authorities where they undertake to enter into a definitive plea agreement regarding the contingencies it faces as a consequence of the aforementioned processes. The Company’s Management does not rule out the possibility of finding, in the future, adverse evidence, nor does it rule out that the authorities or third parties will find, in the future, adverse evidence not currently known to date during the investigations being conducted.

As indicated in the Notes 12 and 15 to the consolidated financial statements, the Company has an account receivable from Gasoducto Sur Peruano (an associate entity of Graña y Montero S.A.A.) for S/ 544 million as of December 31, 2019. Gasoducto Sur Peruano entered into a bankruptcy process due to the early termination of the concession contract with the Peruvian government to build, operate and maintain the transportation system for natural gas pipelines, this process is in the creditors’ recognition stage that will form the creditors’ assembly. Based on the preliminary plea agreement signed with the Peruvian authorities, the Company desisted from requesting an arbitration for the collection of that debt; however, according to the opinion of its legal advisors, the Company considers that Gasoducto Sur Peruano can exercise its right to collect from the Peruvian State for the net book value of the concession assets and thus recover the corresponding accounts receivable.

F-2

Basis for Opinion

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the Management’s Report on Internal Control over Financial Reporting referred to above. Our responsibility is to express opinions on these financial statements and on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

/s/ Moore Assurance S.A.S

Moore Assurance S.A.S

We have served as the Company’s auditor since 2017.

Bogota, Colombia

June 12, 2020

F-3

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(All amounts are expressed in thousands of S/ unless otherwise stated)

ASSETS

			As at December 31,		As at December 31,
	Note		2018		2019
Current assets
Cash and cash equivalents		9		801,140		948,978
Trade accounts receivables, net		10		1,007,828		821,737
Work in progress, net		11		28,538		49,457
Accounts receivable from related parties		12		34,903		36,658
Other accounts receivable		13		588,451		444,500
Inventories, net		14		514,047		552,573
Prepaid expenses				10,549		11,348
				2,985,456		2,865,251
Non-current assets as held for sale				247,798		205,418
Total current assets				3,233,254		3,070,669
Non-current assets
Trade accounts receivable, net		10		1,020,067		753,202
Work in progress, net		11		32,212		23,117
Accounts receivable from related parties		12		778,226		546,941
Prepaid expenses				33,697		27,934
Other accounts receivable		13		302,957		300,323
Investments in associates and joint ventures		15		257,765		37,035
Investment property				29,133		28,326
Property, plant and equipment, net		16		470,554		443,870
Intangible assets, net		17		847,095		853,315
Right-of-use assets, net		16.2		—		78,813
Deferred income tax asset		24		425,436		240,919
Total non-current assets				4,197,142		3,333,795
Total assets				7,430,396		6,404,464

LIABILITIES AND EQUITY

			As at December 31,			As at December 31,
	Note		2018			2019
Current liabilities
Borrowings		18		826,474			454,260
Bonds		19		39,167			44,737
Trade accounts payable		20		1,079,531			1,136,121
Accounts payable to related parties		12		55,941			38,916
Current income tax				25,807			47,999
Other accounts payable		21		632,669			635,305
Provisions		22		6,197			113,483
Total current liabilities				2,665,786			2,470,821
Non-current liabilities as held for sale				225,828			210,025
Total current liabilities				2,891,614			2,680,846
Non-current liabilities
Borrowings		18		376,198			344,806
Bonds		19		897,875			879,305
Other accounts payable		21		574,110			273,101
Accounts payable to related parties		12		21,849			22,583
Provisions		22		103,411			214,952
Derivative financial instruments				61			52
Deferred income tax liability		24		75,347			112,734
Total non-current liabilities				2,048,851			1,847,533
Total liabilities				4,940,465			4,528,379
Equity
Capital		23		729,434			871,918
Legal reserve				132,011			132,011
Voluntary reserve				29,974			29,974
Share Premium				992,144			1,132,179
Other reserves				(170,620	)		(177,506	)
Retained earnings				375,417			(510,766	)
Equity attributable to controlling interest in the Company				2,088,360			1,477,810
Non-controlling interest				401,571			398,275
Total equity				2,489,931			1,876,085
Total liabilities and equity				7,430,396			6,404,464

The accompanying notes on pages 7 to 112 are an integral part of the consolidated financial statements.

F-4

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

(All amounts are expressed in thousands of S/ unless otherwise stated)

		For the period ended December 31,
	Note	2017			2018			2019
		(as restated)
Revenues from construction activities			2,214,108			1,961,100			2,411,880
Revenues from services provided			956,300			1,003,623			1,089,465
Revenue from real estate and sale of goods			843,605			934,739			583,659
			4,014,013			3,899,462			4,085,004
Cost of construction activities			(2,107,206	)		(1,921,112	)		(2,351,563	)
Cost of services provided			(770,792	)		(741,172	)		(866,326	)
Cost of real estate and sale of goods			(633,563	)		(562,689	)		(425,352	)
	26		(3,511,561	)		(3,224,973	)		(3,643,241	)
Gross profit			502,452			674,489			441,763
Administrative expenses	26		(322,454	)		(278,433	)		(213,908	)
Other income and expenses	28		(32,869	)		(61,335	)		(326,754	)
Gain (loss) from the sale of investments			34,545			(7	)		—
Operating profit (loss)			181,674			334,714			(98,899	)
Financial expenses	27		(150,777	)		(247,982	)		(231,709	)
Financial income	27		13,742			50,925			74,656
Share of the profit or loss of associates and joint ventures accounted for using the equity method	15 a)-b)		473			(3,709	)		(218,774	)
Profit (loss) before income tax			45,112			133,948			(474,726	)
Income tax expense	29		(46,305	)		(113,318	)		(319,957	)
(Loss) profit from continuing operations			(1,193	)		20,630			(794,683	)
Profit (loss) from discontinued operations	36		210,431			36,785			(43,959	)
Profit (loss) for the period			209,238			57,415			(838,642	)
Profit (loss) attributable to:
Owners of the Company			148,738			(83,188	)		(884,721	)
Non-controlling interest			60,500			140,603			46,079
			209,238			57,415			(838,642	)
Earnings (loss) per share attributable to owners of the Company during the year	34		0.225			(0.125	)		(1.076	)
Loss per share from continuing operations attributable to owners of the Company during the year			(0.101	)		(0.099	)		(1.023	)

The accompanying notes on pages 7 to 112 are an integral part of the consolidated financial statements.

F-5

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(All amounts are expressed in thousands of S/ unless otherwise stated)

			For the year ended December 31,
	Note		2017			2018			2019
Profit (loss) for the year				209,238			57,415			(838,642	)
Other comprehensive income:
Items that will not be reclassified to profit or loss
Remeasurement of actuarial gains and losses, net of tax				(4,031	)		16,589			—
Items that may be subsequently reclassified to profit or loss
Cash flow hedge, net of tax		30		482			119			6
Foreign currency translation adjustment, net of tax		30		(11,341	)		5,733			(8,170	)
Exchange difference from net investment in a foreign operation, net of tax		30		6,610			(8,147	)		(456	)
				(4,249	)		(2,295	)		(8,620	)
Other comprehensive income for the year, net of tax				(8,280	)		14,294			(8,620	)
Total comprehensive income for the year				200,958			71,709			(847,262	)
Comprehensive income attributable to:
Owners of the Company				143,575			(67,548	)		(891,607	)
Non-controlling interest				57,383			139,257			44,345
				200,958			71,709			(847,262	)
Comprehensive income attributable to owners of the Company:
Continuing operations				(62,773	)		(131,284	)		(848,994	)
Discontinued operations				206,348			63,736			(42,613	)
				143,575			(67,548	)		(891,607	)

The accompanying notes on pages 7 to 112 are an integral part of the consolidated financial statements.

F-6

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR DECEMBER 31, 2017, 2018 AND 2019

(All amounts are expressed in thousands of S/ unless otherwise stated)

	Attributable to the controlling interests of the Company
	Number of shares In thousands		Capital		Legal reserve		Voluntary reserve		Share premium			Other reserves			Retained earnings			Total			Non-controlling interest			Total
Balances as of January 1, 2017		660,054		660,054		132,011		29,974		882,464			(167,456	)		443,377			1,980,424			509,313			2,489,737
Profit for the year		—		—		—		—		—			—			148,738			148,738			60,500			209,238
Cash flow hedge		—		—		—		—		—			458			—			458			24			482
Adjustment for actuarial gains and losses		—		—		—		—		—			—			(2,948	)		(2,948	)		(1,083	)		(4,031	)
Foreign currency translation adjustment		—		—		—		—		—			(9,166	)		—			(9,166	)		(2,175	)		(11,341	)
Exchange difference from net investment in a foreign operation		—		—		—		—		—			6,493			—			6,493			117			6,610
Comprehensive income of the year		—		—		—		—		—			(2,215	)		145,790			143,575			57,383			200,958
Transactions with shareholders:
- Dividend distribution		—		—		—		—		—			—			—			—			(59,677	)		(59,677	)
- Contributions (devolution) of non-controlling shareholders, net		—		—		—		—		—			—			—			—			(33,197	)		(33,197	)
- Additional acquisition of non-controlling interest		—		—		—		—		(669	)		—			—			(669	)		(273	)		(942	)
- Deconsolidation of former subsidiary		—		—		—		—		—			—			—			—			(7,801	)		(7,801	)
Total transactions with shareholders		—		—		—		—		(669	)		—			—			(669	)		(100,948	)		(101,617	)
Balances as of December 31, 2017		660,054		660,054		132,011		29,974		881,795			(169,671	)		589,167			2,123,330			465,748			2,589,078
Balances as of January 1, 2018		660,054		660,054		132,011		29,974		881,795			(169,671	)		589,167			2,123,330			465,748			2,589,078
- IFRS adoption		—		—		—		—		—			—			(52,564	)		(52,564	)		(979	)		(53,543	)
Initial balances restated		660,054		660,054		132,011		29,974		881,795			(169,671	)		536,603			2,070,766			464,769			2,535,535
(Loss) profit for the year		—		—		—		—		—			—			(83,188	)		(83,188	)		140,603			57,415
Cash flow hedge		—		—		—		—		—			113			—			113			6			119
Adjustment for actuarial gains and losses		—		—		—		—		—			—			16,589			16,589			—			16,589
Foreign currency translation adjustment		—		—		—		—		—			6,930			—			6,930			(1,197	)		5,733
Exchange difference from net investment in a foreign operation		—		—		—		—		—			(7,992	)		—			(7,992	)		(155	)		(8,147	)
Comprehensive income of the year		—		—		—		—		—			(949	)		(66,599	)		(67,548	)		139,257			71,709
Transactions with shareholders:
- Dividend distribution		—		—		—		—		—			—			—			—			(102,772	)		(102,772	)
- Contributions (devolution) of non-controlling shareholders, net		—		—		—		—		—			—			—			—			(84,442	)		(84,442	)
- Additional acquisition of non-controlling interest		—		—		—		—		(9,583	)		—			—			(9,583	)		(4,050	)		(13,633	)
- Capital Increase		69,380		69,380		—		—		68,223			—			—			137,603			—			137,603
- Deconsolidation CAM Group		—		—		—		—		—			—			(42,878	)		(42,878	)		18,221			(24,657	)
- Deconsolidation Stracon GyM		—		—		—		—		51,709			—			(51,709	)		—			(29,412	)		(29,412	)
Total transactions with shareholders		69,380		69,380		—		—		110,349			—			(94,587	)		85,142			(202,455	)		(117,313	)
Balances as of December 31, 2018		729,434		729,434		132,011		29,974		992,144			(170,620	)		375,417			2,088,360			401,571			2,489,931
Balances as of January 1, 2019		729,434		729,434		132,011		29,974		992,144			(170,620	)		375,417			2,088,360			401,571			2,489,931
- IFRS adoption		—		—		—		—		—			—			(1,462	)		(1,462	)		—			(1,462	)
Initial balances restated		729,434		729,434		132,011		29,974		992,144			(170,620	)		373,955			2,086,898			401,571			2,488,469
(Loss) profit for the year		—		—		—		—		—			—			(884,721	)		(884,721	)		46,079			(838,642	)
Cash flow hedge		—		—		—		—		—			6			—			6			—			6
Foreign currency translation adjustment		—		—		—		—		—			(6,440	)		—			(6,440	)		(1,730	)		(8,170	)
Exchange difference from net investment in a foreign operation		—		—		—		—		—			(452	)		—			(452	)		(4	)		(456	)
Comprehensive income of the year		—		—		—		—		—			(6,886	)		(884,721	)		(891,607	)		44,345			(847,262	)
Transactions with shareholders:
- Dividend distribution		—		—		—		—		—			—			—			—			(12,762	)		(12,762	)
- Contributions (devolution) of non-controlling shareholders, net		—		—		—		—		—			—			—			—			(32,996	)		(32,996	)
- Additional acquisition of non-controlling		—		—		—		—		1,883			—			—			1,883			(1,883	)		—
- Capital increase		142,484		142,484		—		—		138,152			—			—			280,636			—			280,636
Total transactions with shareholders		142,484		142,484		—		—		140,035			—			—			282,519			(47,641	)		234,878
Balances as of December 31, 2019		871,918		871,918		132,011		29,974		1,132,179			(177,506	)		(510,766	)		1,477,810			398,275			1,876,085

The accompanying notes on pages 7 to 112 are an integral part of the consolidated financial statements.

F-7

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(All amounts are expressed in thousands of S/ unless otherwise stated)

				For the year ended December 31,
	Note			2017			2018			2019
OPERATING ACTIVITIES
Profit (loss) before income tax					255,543			170,202			(535,271	)
Adjustments to profit not affecting cash flows from operating activities:
Depreciation		26			199,794			125,419			97,352
Amortization		26			86,557			112,072			105,278
Impairment of inventories		26			40,908			—			4,503
Impairment of accounts receivable and other accounts receivable		26			19,109			65,076			290,491
Reversal of impairment of inventories					—			(26,993	)		(4,752	)
Debt condonation					—			—			(18,186	)
Impairment of property, plant and equipment		26			14,680			5,664			20,018
Impairment of intangible assets		28			49,609			—			45,821
Reversal of impairment of accounts receivable					—			—			(19,448	)
Reversal of impairment of intangible assets					—			—			(20,676	)
Indemnification					3,220			686			—
Profit on fair value of financial asset at fair value through profit or loss					(34	)		—			—
Change in the fair value of the liability for put option		28			(1,400	)		(6,122	)		4,697
Other provisions		22			9,510			75,369			186,894
Financial expense, net					138,016			177,649			152,970
Impairment of investments					—			—			384
Share of the profit and loss of associates and joint ventures accounted for using the equity method		15 a	)-b)		(1,327	)		3,709			218,774
Reversal of provisions		22			(1,044	)		(6,218	)		(7,471	)
Disposal of assets					5,438			16,327			833
Disposal of investments					106			—			—
Loss (profit) on sale of property, plant and equipment		16			(26,883	)		7,105			(11,892	)
Loss on sale of non-current asset held for sale					45			—			—
Loss on sale of available-for-sale financial assets					(25,768	)		1,529			—
Profit on sale of investments in subsidiaries					(244,313	)		(73,642	)		—
Loss on remeasurement of accounts receivable					15,807			25,110			45,363
Net variations in assets and liabilities:
Trade accounts receivable and unbilled work in progress					(213,126	)		(236,011	)		457,709
Other accounts receivable					33,196			190,354			148,833
Other accounts receivable from related parties					(245,688	)		24,609			(11,178	)
Inventories					279,867			200,575			(34,575	)
Pre-paid expenses and other assets					(6,494	)		18,309			4,964
Trade accounts payable					463,401			10,917			58,973
Other accounts payable					49,319			(311,848	)		(282,771	)
Other accounts payable to related parties					(66,819	)		92,613			(24,461	)
Provisions					(1,680	)		(6,615	)		(2,178	)
Interest payment					(173,662	)		(188,704	)		(157,475	)
Payments for purchases of intangibles - Concessions					(20,178	)		(10,305	)		(25,917	)
Payment of income tax					(144,545	)		(177,563	)		(94,669	)
Net cash provided by operating activities					491,164			279,273			592,937
INVESTING ACTIVITIES
Sale of investment					391,786			222,971			—
Sale of property, plant and equipment					127,221			31,852			18,607
Sale of financial asset at fair value through profit or loss					98			—			—
Sale of non-current assets held for sale, net					43,367			16,244			—
Interest received					6,992			36,508			6,552
Dividends received		15 a	)-b)		3,758			1,823			1,517
Payment for purchase of investments properties					(1,183	)		(209	)		(88	)
Payments for intangible purchase					(97,112	)		(86,799	)		(80,709	)
Payments for purchase and contributions on investment in associate and joint ventures					(2,116	)		(3,770	)		—
Payments for property, plant and equipment purchase					(123,941	)		(80,765	)		(76,707	)
Net cash provided by (applied to) investing activities					348,870			137,855			(130,828	)
FINANCING ACTIVITIES
Loans received					1,415,113			1,018,744			581,637
Amortization of loans received					(2,044,256	)		(1,265,920	)		(1,074,259	)
Amortization of bonds issued					(39,151	)		(28,914	)		(31,335	)
Payment for transaction costs for debt					(31,286	)		—			(4,770	)
Dividends paid to non-controlling interest		35 d	)		(43,942	)		(102,772	)		(12,762	)
Cash received (return of contributions) from non-controlling shareholders					(33,197	)		(59,053	)		(32,996	)
Capital increase		23			—			137,603			280,636
Acquisition or sale of interest in a subsidiary of non-controlling shareholders					(942	)		389			—
Net cash applied to financing activities					(777,661	)		(299,923	)		(293,849	)
Net increase in cash					62,373			117,205			168,260
Exchange difference					(34,867	)		57,756			(20,303	)
Cash and cash equivalents at the beginning of the year					598,554			626,060			801,021
Cash and cash equivalents at the end of the year		9			626,060			801,021			948,978
NON-CASH TRANSACTIONS:
Interest debt capitalization					26,015			3,361			7,229
Acquisition of assets through finance leases					48,507			2,365			3,851
Accounts payable to the non-controlling interest for purchase of investments					—			14,022			—
Return of contribution in inventories					—			25,389			—
Dividends declared to non-controlling interest					15,735			—			—
Acquisition of right-of-use assets					—			—			101,745
Deconsolidation from non-controlling interest					7,801			54,069			—

The accompanying notes on pages 7 to 112 are an integral part of the consolidated financial statements.    

F-8

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2017, 2018 AND 2019

1 GENERAL INFORMATION

a) Incorporation and operations

Graña y Montero S.A.A. (hereinafter the “Company”) was incorporated in Perú on August 12, 1996, as a result of the equity spin-off of Inversiones GyM S.A. (formerly Graña y Montero S.A.). The Company’s legal address is Av. Paseo de la República 4675, Surquillo Lima, Perú and is listed on the Lima Stock Exchange and the New York Stock Exchange (NYSE).

The Company is the parent of the Graña y Montero Group that includes the Company and its subsidiaries (hereinafter, the “Group”) and is mainly engaged in holding investments in different Group companies. Additionally, the Company provides services of general management, financial management, commercial management, legal advisory, human resources management and leases office space to the Group companies.

The Group is a conglomerate of companies with operations including different business activities, the most significant are engineering and construction, infrastructure (public concession ownership and operation) and real estate businesses. See details of operating segments in Note 7.

b) Authorization for the issue of the financial statements

The consolidated financial statements for the year ended December 31, 2019, have been prepared and issued with Management and Board of Directors’ authorization on March 5, 2020, and will be submitted for consideration and approval at the General Shareholders’ Meeting to be held within the term established by Peruvian law. Management expects that the consolidated financial statements as of December 31, 2019, will be approved with no changes.

c) Current situation of the Company

As a result of decisions of a previous administration, the Group is involved in a series of corruption cases mainly between 2004 and 2015, which have generated criminal investigations by the Prosecutor’s Office and administrative investigations by a regulatory body. Such situations led to organizational changes, external investigations, independent of the Company’s Management, related to the Group’s business with Odebrecht and the facts under criminal investigation, as well as other internal measures as explained below:

• On January 9, 2017, the Board of Directors approved the performance of an independent investigation related to six projects developed in association with companies of the Odebrecht Group.

• On March 30, 2017, the Board of Directors created a Risk, Compliance and Sustainability Committee, who was in charge of the oversight of the investigation independently of Management. The external investigation was undertaken by the law firm Simpson Thacher & Bartlett LLP, with the assistance of forensic accountants, who reported exclusively to the Risk, Compliance and Sustainability Committee.

• The external investigation concluded on November 2, 2017 and identified no evidence to conclude that any company personnel engaged in bribery in connection with any of our Company’s public projects in Peru with Odebrecht or its subsidiaries, or that any Company personnel was aware of, or knowingly participated in, any corrupt payments made in relation to such projects.

F-9

• Subsequently, in August 2019, José Graña Miró Quesada, a shareholder and the former chairman of our Company, indicated in public statements to the media that he and Hernando Graña Acuña, a shareholder and former board member of our Company and the former chairman of our subsidiary GyM, had initiated a process of plea bargaining to cooperate with Peruvian prosecutors in respect of multiple projects in which our Company participated with Odebrecht and in respect of the alleged “construction club.” According to news reports, in the plea bargaining process, José Graña and Hernando Graña may have provided information related to wrongdoing or knowledge of improper behavior while they were at the Company; however, given the confidential nature of these proceedings, the reported information is limited and difficult to verify. Any admission or other evidence of wrongdoing or knowledge by José Graña or Hernando Graña of improper behavior in respect of our participation in consortia with Odebrecht would be inconsistent with information gathered during the internal investigation and would have a material impact on the findings of the prior internal investigation.

• As new information about the various Peruvian criminal investigations of the Company emerged, and news that the Company’s former chairman and director were plea bargaining with Peruvian authorities, the Company’s Board of Directors continued to investigate the allegations that were the subject of the investigations, including matters relating to the “construction club,” which was beyond the scope of the internal investigation conducted by Simpson Thacher & Bartlett LLP. After an extensive and detailed review process, in line with its commitment to transparency and integrity, the Company shared information relevant to the investigations with the Peruvian authorities within the framework of a plea bargain process.

• As a result of its contribution to the investigations, on December 27, 2019, the Company signed a preliminary settlement and cooperation agreement whereby the Anti-Corruption Prosecutor and the Ad hoc Prosecutor’s Office promise to execute a final plea bargain agreement with the Company that would provide the Company with certainty regarding the contingencies it faces as a result of the above-mentioned processes. Additionally, in the aforementioned preliminary agreement, the Anti-Corruption Prosecutor and the Ad Hoc Attorney General’s Office authorize the Company to disclose its existence but maintain its content confidential.

At the same time, over the last three years, the new administration together with the new board initiated a transformation process based on the principles of Truth, Transparency and Integrity, making profound changes in the organization of the Company,such as the reconfiguration of the Board of Directors with an independent majority, new shareholding composition, as well as the creation of new governance practices, such as the Corporate Risk Management and autonomous Compliance function, with direct report to the Board of Directors, among other actions.

Criminal investigations derived from projects developed in partnership with companies of the Odebrecht group

In connection with the Lava Jato case, the Company participated directly or through its subsidiaries as minority partner in certain entities that developed six infrastructure projects in Peru with companies belonging to the Odebrecht group (hereinafter Odebrecht).

In 2016, Odebrecht entered into a Plea Agreement with the authorities of the United States Department of Justice and the Office of the District Attorney for the Eastern District of New York by which it admitted corruption acts in connection with some of these projects in which the Company participate as minority partner.

• IIRSA Sur

In relation to investigations on IIRSA Sur, the former Chairman of the Board of Directors was included as a subject of an investigation for collusion, and a former director and a former executive was included as a subject of an investigation for money laundering. Subsequently, Graña y Montero S.A.A. and GyM S.A. have been included as third-party civilians responsible in the process, which means that it will be assessed whether the obligation to indemnify the state for damages resulting from the facts under investigation will be imposed on these entities.

• Electric Train construction project

The first Preparatory Investigation Court of the Judiciary decided to incorporate GyM S.A. as civil third-party responsible in the process related to the construction of the Electric train construction Project, tranches 1 and 2. In this investigation the former Chairman of the Board, a former director and a former manager have been charged.

• Gasoducto Sur Peruano (GSP)

In 2019, the Company concluded that it may have exposure with respect to the preliminary investigation process conducted in relation to GSP (the South Peruvian Gas Pipeline project), even though as of the date hereof, it has not been indicted or incorporated as a civilly liable third-party, although the former Chairman of the Board of Directors and a former director are seeking plea bargain agreements in relation to this process, among others.

F-10

In addition to the cases described for which a provision for civil damages has been registered, there are two projects carried out in partnership with Odebrecht that are not currently under investigation. If an investigation is initiated and evidence of wrongdoing is found, the maximum possible civil damage exposure estimated under Law 30737 for both projects would be S/52.7 million (US$16 million approximately).

Criminal investigations in conection to the Construction Club case

GyM S.A. has been incorporated, along with other construction companies, in the criminal investigation that the Public Ministry has been carrying out for the alleged crime of corruption of officials in relation to the so-called Construction Club. Similarly, at the end of February 2020, the Public Ministry has requested the incorporation of Concar S.A., the latter is pending judicial decision.

Like officials of other construction companies, a former commercial manager of GyM S.A., the former president of the Board of Directors, a former director and the former Corporate General Manager of the company have been included in the criminal investigation.

Anticorruption Law - effects on the Group

Law 30737 and its regulation issued by Supreme Decree 096-2018-EF have mitigated the Company and subsidiaries exposure to the corruption cases. These rules set clear guidelines to estimate the potential compensation reducing the uncertainty derived from the legal proceedings, by among other things, preventing the imposition of liens or attachments of assets that would impair its ability to operate.

The benefits of the mentioned rules are subject to the fulfillment of the following obligations:

• The obligation to set up a trust that will guarantee any eventual payment obligation of an eventual civil compensation in favor of the Peruvian Government;

• The obligation not to transfer funds abroad without the prior consent of the Ministry of Justice;

• The implementation of a compliance program; and

• The obligation to disclose information to the authorities and to collaborate in the investigation.

The Group has designed a compliance program which is currently under implementation, it fully cooperates with the authorities in its investigations and has executed a trust agreement with the Ministry of Justice, under which the Company has established for an approximate amount of S/80 million (equivalent to US$24 million).

On the other hand, based on the standards indicated and their guidelines, Management has estimated that the value of the civil damages for the cases described above is S/280 million (US$85 million) and has registered as of December 31st, 2019 S/153.9 million (equivalent to US$46.6 million) as net present value (Note 22).

On the other hand, in cases where a provision for civil reparation has been registered, there are two projects carried out in partnership with Odebrecht that to date are not under investigation. If this is started and some evidence is found, the maximum possible exposure for civil reparation estimated according to Law 30737 for both projects would be S/52.7 million (approximately US$16 million).

However, the Company, through its external legal advisors, continues to conduct an ongoing evaluation of the information related to the criminal investigations described in this note in order to keep its defense prepared in the event any new charges may arise during those investigations. In conducting the aforementioned evaluation, the Company does not rule out the possibility of finding new incriminating evidence that is not known to date.

F-11

Investigations and administrative process initiated by INDECOPI in conection to the Construction Club case

On July 11, 2017, the Peruvian National Institute for the Defense of Free Competition and the Protection of Intellectual Property (“INDECOPI”) initiated an investigation against several construction companies, including GyM S.A., about the existence of an alleged cartel called the Construction Club.

Throughout the investigation, GyM S.A. has provided to INDECOPI with all the information requested and continues collaborating with the ongoing investigation.

On February 11, 2020, GyM S.A. was notified by the Technical Secretariat of the Commission for the Defense of Free Competition (“INDECOPI”) with the resolution that begins a sanctioning administrative procedure involving a total of 35 companies and 28 natural persons, for alleged anticompetitive conduct in the market of Public Works. The resolution does not include the assignment of responsibilities or the result of the administrative disciplinary procedure, which will be determined at the end of the said procedure. The procedure is in a probatory stage, therefore, INDECOPI has not carried out actions in order to quantifying the possible penalties that could result.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied in all the years presented, unless otherwise stated.

2.1 Basis of preparation

The consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations issued by the IFRS Interpretations Committee (IFRIC) applicable to companies reporting under IFRS. The financial statements comply with IFRS as issued by the IASB in force as of December 31, 2018, and December 31, 2019, respectively.

The consolidated financial statements have been prepared under the historical cost convention, except for derivative financial instruments, financial assets at fair value through profit or loss, and available-for-sale financial assets measured at fair value. The financial statements are presented in thousands of Peruvian Sol unless otherwise stated.

The preparation of the consolidated financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires that the Management exercise its critical judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

2.2 Consolidation of financial statements

a) Subsidiaries

Subsidiaries are entities over which the Company has control. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date when control ceases.

The Group applies the acquisition method to account for business combinations. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

F-12

The Group evaluates the measurement of the non-controlling interest on an acquisition-by-acquisition basis. As of December 31, 2018, and 2019, the measurements of the non-controlling interest in the Group’s acquisitions were made at the non-controlling interest’s proportionate share of the recognized amounts of the acquiree’s identifiable net assets.

Business acquisition-related costs are expensed as incurred.

Any contingent consideration assumed by the Group with the selling party is recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration are recognized in accordance with IFRS 9 “Financial Instruments” as profit or loss.

Goodwill is initially measured as the excess of the acquisition cost, the fair value at the acquisition date of any interest previously acquired plus the fair value of the non-controlling interest, over the net identifiable assets acquired and liabilities and contingent liabilities assumed. If the acquisition cost is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized in profit or loss at the time of acquisition.

For consolidating subsidiaries, balances, income, and expenses from transactions between Group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognized as assets are also eliminated. Group companies use common accounting practices, except for those that are specifically required for specific businesses.

b) Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions, in other words as transactions with owners in their capacity as owners. The difference between the fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interest are also recorded in equity at the time of disposal.

c) Disposal of subsidiaries

When the Group ceases to have control over a subsidiary, any retained interest in the entity is re-measured at its fair value at the date when control is lost, with the change in carrying amount recognized in profit or loss at such date. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that the amount previously recognized in other comprehensive income is reclassified to profit or loss.

d) Joint arrangements

Contracts in which the Group and one or more of the contracting parties have joint control on the relevant joint activities are called joint arrangements.

Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. The Group has assessed the nature of its joint arrangements and determined them to be both joint ventures as well as joint operations.

Joint ventures are accounted for using the equity method. Under this method, interests in joint ventures are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the post-acquisition profits or losses and movements in the comprehensive income statement.

F-13

The Group assesses on an annual basis whether there is any objective evidence that the investment in the joint ventures and associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the impairment loss in share of the profit or loss in associates and joint ventures under the equity method of accounting in the income statement. In addition, the Group stops the use of the equity method if the entity ceases to be an operating entity.

Joint operations are joint arrangements whereby the parties that have joint control of the arrangement, have rights over the assets, and obligations for the liabilities, relating to the arrangement. Each party recognizes its assets, liabilities, revenue and cost and its share of any asset or liability jointly held and, on any revenue, or cost arisen from the joint operation.

In the Group, joint operations mainly relate to consortiums (entities without legal personality) created exclusively for the development of a construction contract. Considering that the only objective of the consortium is to develop a specific project, all revenue and costs are included within revenue from construction activities and cost of construction activities, respectively.

e) Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a holding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method (see section d) above).

Profits and losses resulting from transactions between the Group and its associates are recognized in the Group’s consolidated financial statements only to the extent of unrelated investor’s interests in the associates. Unrealized losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates are changed where necessary to ensure consistency with the policies adopted by the Group.

Impairment losses are measured and recorded in accordance with section d) above.

2.3 Segment reporting

Operating segments are reported in a consistent manner with internal reporting provided to the Management of the Group.

If an entity changes the structure of its internal organization in a manner that causes the composition of its reportable segments to change, the Group restates the information for earlier periods unless the information is not available.

2.4 Foreign currency translation

a) Functional and presentation currency

The consolidated financial statements are presented in Peruvian soles, which is the functional and presentation currency of the Group. All subsidiaries, joint arrangements, and associates use the Peruvian Sol as their functional currency, except for foreign entities, for which the functional currency is the currency of the country in which they operate.

b) Transactions and balances

Foreign currency transactions are translated into the functional currency using prevailing the exchange rates at the date of the transactions or valuation when items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in the consolidated income statement, except when deferred in other comprehensive income. Foreign exchange gains and losses of all monetary items are included in the income statement within financial income or expense.

F-14

Exchange differences arising on loans from the Company to its subsidiaries in foreign currencies are recognized in the separate financial statements of the Company and separate financial statements of the subsidiaries. In the consolidated financial statements, such exchange differences are recognized in other comprehensive income and are re-classified in the income statement on the disposal of the subsidiary or debt repayment to the extent such loans qualify as part of the “net investment in a foreign operation”.

c) Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency of the Group are translated into the presentation currency as follows:

i) Assets and liabilities for each statement of financial position are translated using the closing exchange rate prevailing at the date of the consolidated statement of financial position;

ii) income and expenses for each income statement are translated at the average exchange rate (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rate on the date of the transaction);

iii) capital is translated by using the historical exchange rate for each capital contribution made; and

iv) all exchange differences are recognized as separate components in other comprehensive income, within foreign currency translations adjustment.

Goodwill and fair value adjustments arising from the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated at the closing exchange rate. Exchange differences are recognized in other comprehensive income.

2.5 Public services concession agreements

Concession agreements signed between the Group and the Peruvian Government entitle the Group, as a Concessionaire, to assume obligations for the construction or improvement of infrastructure and which qualify as public service concessions are accounted as defined by IFRIC 12 “Service Concession Arrangements”. The consideration to be received from the Government for the services of constructing or improving public infrastructure is recognized as a financial asset, an intangible asset or both, as stated below:

a) It is recognized as a financial asset to the extent that it has a contractual right to receive cash or other financial assets either because the Government secures the payment of specified or determinable amounts or because the Government will cover any difference arising from the amounts actually received from public service users in relation with the specified or determinable amounts. These financial assets are recognized initially at fair value and subsequently at amortized cost (financial asset model).

b) It is recognized as an intangible asset to the extent that the service agreement grants the Group a contractual right to charge users of the public service. The resulting intangible asset is measured at cost and is amortized as described in Note 2.15 (intangible asset model).

c) It is recognized as a financial asset and an intangible asset when the Group recovers its investment partially by a financial asset and partially by an intangible asset (bifurcated model).

2.6 Cash and cash equivalents

In the consolidated statements of financial position and cash flows, cash and cash equivalents include cash on hand, on-demand bank deposits, other highly liquid investments with original maturities of three months or less and bank overdrafts. In the consolidated statement of financial position, bank overdrafts are included in the balance of borrowings as current liabilities.

F-15

2.7 Financial assets

2.7.1  Classification and measurement

The Group classifies its financial assets, according to its subsequent measurement, in the following categories: i) amortized cost; ii) financial assets at fair value through other comprehensive income and iii) financial assets at fair value through profit or loss. The classification depends on the purpose for which the financial assets were acquired on the basis of the Group’s business model for managing the financial assets and the characteristics of the contractual cash flows of the financial asset.

Management determines the classification of its financial assets at the date of its initial recognition and re-evaluates this classification at the date of each closing of its consolidated financial statements. As of December 31, 2018, and 2019, the Group only maintains financial assets in the following categories:

a) Amortized cost

This category is the most relevant for the Group. The Group measures financial assets at amortized cost if the following conditions are met:

i) The financial asset is held within a business model with the objective of maintaining the financial assets to obtain the contractual cash flows; and

ii) The contractual terms of the financial asset generate cash flows, on specific dates, that are only payments of the principal and interest on the amount of the outstanding principal.

Financial assets at amortized cost are subsequently measured using the effective interest method and are subject to impairment. Profits and losses are recognized in profits or losses when the asset is written off, modified or impaired.

Trade accounts receivable, accounts receivable from related companies, other accounts receivable, work in progress and cash and cash equivalents are included in current assets except for those over twelve months after the date of the consolidated statement of financial position. The latter are classified as non-current assets.

b) Financial assets at fair value through other comprehensive results

Financial assets at fair value through other comprehensive income of the Group are classified in this category when they meet the following conditions:

i) keep them within a business model whose objective is achieved by obtaining contractual cash flows and selling financial assets; and

ii) the contractual terms of the financial asset give rise, on specific dates, to cash flows that are only payments of the principal and interest on the outstanding principal amount.

The investment account at Inversiones en Autopistas S.A. is included in this category.

c) Financial assets at fair value through profit or loss

Financial assets that do not meet the criteria of amortized costs or fair value through other comprehensive income are measured at fair value through profit or loss. The result in a debt investment that is subsequently measured at fair value through gains and losses is recognized in the consolidated statement of comprehensive income in the period in which it occurs.

Financial assets at fair value through profit or loss are non-derivative financial assets designated by the Group at their fair value upon initial recognition and are held for sale. These are included in current assets.

F-16

2.7.2 Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights over the cash flows of the financial asset expire, or when it transfers the rights to receive the contractual cash flows in a transaction in which all the risks and benefits of ownership of the financial asset are substantially transferred, or does not transfer or retain substantially all the risks and benefits related to the property and does not retain control over the assets transferred.

The Group participates in transactions in which it transfers the assets recognized in its statement of financial position but retains all or substantially all the risks and advantages of the assets transferred, and/or control over them. In these cases, the assets transferred are not derecognized and are measured on a basis that reflects rights and obligations that the Group has retained.

2.8 Impairment of financial assets

IFRS 9 “Financial Instruments”, requires to register expected credit losses of all financial assets, except for those that are carried at fair value with an effect on results, estimating it over 12 months or for the entire life of the financial instrument (“lifetime”). In accordance with the provisions of the standard, the Group applies the simplified approach (which estimates the loss for the entire life of the financial instrument), for the commercial debtors of the rental business line of the real estate sector, and the general approach for the trade accounts receivables, work in progress and other accounts receivable; the same that requires evaluating whether or not a significant increase in risk exists to determine whether the loss should be estimated based on 12 months after the reporting date or during the entire life of the asset.

The Group has established a policy to conduct an evaluation, at the end of each reporting period, to identify whether the asset has suffered a significant increase in credit risk since the initial date. Both the credit losses expected at 12 months and the expected credit losses during the life of the asset are calculated individually or collectively, depending on the nature of the portfolio.

For financial assets for which the Group has no reasonable expectation of recovering, either the entire outstanding amount or a portion thereof, the gross carrying amount of the financial asset is reduced. This is considered a decrease in (partial) accounts of the financial asset.

2.9 Derivative financial instruments and hedging activities

Derivatives are initially recognized at fair value on the date a derivative contract is signed into and are subsequently re-measured at their fair value at the end of each reporting period. The method for recognizing the gain or loss resulting from changes in the fair value of the derivatives depends on whether they are designated as hedging instrument, and if so, the nature of the item being hedged.

The Group designates certain derivatives as hedges of a particular risk associated with a recognized asset or liability (fair value hedge) or a highly probable forecast transaction (cash flow hedge). Derivatives are initially recognized at fair value on the date of subscription of the contract and are subsequently recognized at their fair value.

The Group documents, at the inception of the transaction, the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedges transactions. The Group also documents its assessment, both at hedge inception as at the date of each subsequent statement of financial position, of whether the derivatives used in hedges transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

The fair value of various derivative instruments used for hedging purposes and changes in the account reserves for hedges in equity are disclosed in Note 8. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity period of the hedged item is more than 12 months and as a current asset or liability when the remaining maturity period of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability.

F-17

Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as fair value hedges is recognized as other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in the income statement. Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss (for example, when the forecasted sale that is hedged takes place).

The gain or loss relating to the effective portion of interest rate swaps hedging variable rate borrowings is recognized in the income statement as “Financial income or Financial expenses”.

However, when the forecasted transaction that is hedged results in the recognition of a non-financial asset (for example, inventory or fixed assets), the gains or losses previously deferred in equity are transferred from equity and are included in the initial measurement of the cost of the non-financial asset. The deferred amounts are finally recognized in cost of goods sold in the case of inventory or depreciation in the case of fixed assets.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and will be reversed to income when the forecasted transaction is finally recognized in the statement of comprehensive income. When a forecasted transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement within “other income and expenses, net”.

2.10 Trade accounts receivables

Trade receivables are amounts due from customers for goods or services sold by the Group. If the collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets. In the Infrastructure segment, it includes the billing of the first purchase of trains as part of the model of the financial asset of the concessionaire GyM Ferrovías S.A (Note 2.5).

Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less any provision for impairment, except for receivables of less than one year that are stated at a nominal amount which is similar to their fair values since they are short term.

It includes management estimates related to the collection rights for services performed pending invoice and/or approval by client, which have been valued using the completion percentage method. It corresponds mainly to the Engineering and Construction segment (subsidiaries GyM S.A. and GMI S.A.). Regarding estimates in concessions, at the Infrastructure segment, corresponds to unconditional contractual collection rights to receive from the Grantor under the model of the financial asset (Note 2.5).

2.11 Work in progress

This account includes the balance of work in progress costs incurred that relates to future activities of the construction contracts and the constructions phase in concessions (see Note 2.26 for detail on revenue recognition from construction activities and concessions services).

Changes in estimates of contract revenues and costs can increase or decrease the estimated margin. When a change in the estimate is known, the cumulative impact of the change is recorded in the period in which it is known, based on the progress completed.

F-18

2.12  Inventories

The inventories include land, works in progress and finished buildings related to the real estate activity, materials used in the construction activity and marketed supplies for exploration and extraction activities.

a) Real estate activity

Land used for the execution of real estate projects is recognized at acquisition cost. Work in progress and finished real estate includes the costs of design, materials, direct labor, borrowing costs (directly attributable to the acquisition, construction, production of the asset), other indirect costs and general expenses related to the construction.

Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Annually, the Group reviews whether inventories have been impaired identifying three groups of inventories to measure their net realizable value: i) land bought for future real estate projects which are compared to their net appraisal value; if the acquisition value is higher, a provision of impairment is recognized; ii) land under construction, impairment is measured based on cost projections; if these costs are higher than selling prices of each real estate unit, an impairment estimated is recorded; and iii) completed real estate units; these inventory items are compared to the selling prices less selling expenses; if these selling expenses are higher, a provision for impairment is recorded.

For the reductions in the carrying amount of these inventories to their net realizable value, a provision is recognized for impairment of inventories with a charge to profit or loss for the year in which those reductions occur.

b) Exploration and extraction activities

Inventories are valued at production costs or net realizable value (NRV), the one with the lowest result, on the basis of the weighted average method. The NRV represents the value at which it is estimated to make oil, gas and its derivatives LPG and HAS, which is calculated on the basis of international prices at which discounts that are usually granted are deducted. Miscellaneous supplies, materials, and spare parts are valued at cost or replacement value, whichever is less based on the average method. The cost of inventories excludes financing expenses and exchange differences. Inventories to be received are recorded at cost by the specific identification method.

The Group constitutes a devaluation of materials charged to income for the year in cases in which the book value exceeds its recoverable value.

c) Other activities

Materials and supplies are recorded at cost by the weighted average method or at their replacement value, the lower. The cost of these items includes freight and non-refundable applicable taxes.

The devaluation of these items is estimated on the basis of specific analyses made by the Management on its rotation. If it is identified that the book value of the stocks of materials and supplies exceeds their replacement value, the difference is charged to income in the year in which this situation is determined.

Management considers that as of the date of the consolidated financial statements it is not necessary to establish additional provisions to those recognized in the financial statements to cover losses due to obsolescence of these inventories.

2.13  Investment property

Investment properties are shown at cost less accumulated depreciation and impairment losses, if any. Subsequent costs attributable to investment properties are capitalized only if it is probable that future economic benefits will flow to the Company and the cost of these assets can be measured reliably; if not, they are recognized as expenses when incurred.

F-19

Repair and maintenance expenses are recognized in profit and loss when they are incurred. If the property’s carrying amount is greater than its estimated recoverable amount, an adjustment to reduce the carrying amount to the recoverable amount is recognized.

Depreciation is determined by the straight-line method at a rate that is considered sufficient to absorb the cost of the assets and the end of the useful life and considered their significant components with useful lives substantially different (each component is treated separately for depreciation purposes). The estimated useful lives of those properties range from 3 to 33 years.

The investment properties held by the Group correspond to: (i) “Agustino Plaza” Shopping Center, located in the El Agustino District, and (ii) the stores situated within the stations of Line 1 of the Lima Metro; the properties owned by the subsidiary Viva GyM S.A. are represented by a fair value amount to US$18.7 million, equivalent to S/62.6 million as of December 31, 2019 (US$19.2 million, equivalent to S/64.3 million, as of December 31 of 2018).

These investment properties have been leased under the modality of an operating lease.

2.14  Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of these items.

Subsequent costs are included in the asset’s carrying amount or are recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Repairs and maintenance expenditures are charged to the statement of income during the financial period in which they are incurred.

Assets under construction are capitalized as a separate component. At their completion, the cost of such assets is transferred to their definitive category.

Replacement units are major spare parts in which depreciation starts when the units are installed for use within the related asset.

Depreciation of machinery, equipment and vehicles recognized as “Major equipment” are depreciated based on their hours of use. Under this method, the total number of work hours that machinery and equipment are capable of producing is estimated and a charge per hour is determined. The depreciation of other assets that do not qualify as “Major equipment” is calculated under the straight-line method to allocate their cost less their residual values over their estimated useful lives, as follows:

	Years
Buildings and facilities		Between 3 and 33
Machinery and equipment		Between 4 and 10
Vehicles		Between 2 and 10
Furniture and fixtures		Between 2 and 10
Other equipment		Between 2 and 10

Residual values and useful lives are reviewed and adjusted as appropriate at each reporting date. Gains and losses on disposals are recognized in “Other income and expenses, net” in the statement of income. Regarding joint operations that carry out construction activities, the difference between the proceeds from disposals of fixed assets and their carrying amount is shown within “revenue from construction activities” and “cost of construction activities”, respectively.

F-20

2.15  Intangible assets

i) Goodwill

Goodwill arises on the acquisition of subsidiaries and represents the excess of the purchase consideration, the amount of any non-controlling interest and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the net identifiable assets acquired. If the payment made, the amount of the non-controlling interest recognized and previously held interest measured at fair value is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statement of income.

Goodwill acquired in a business combination is allocated to each cash-generating units (CGU), or group of CGUs, that is expected to benefit from the synergies of the combination. Goodwill is monitored at the operating segment level.

Goodwill impairment reviews are performed at least annually and when events or changes in circumstances indicate a potential impairment. Any impairment is recognized immediately as an expense in item “Other income and expenses, net” and cannot be reversed later.

ii) Trademarks

Trademarks acquired separately are shown at historical cost. Trademarks acquired in a business combination are recognized at fair value at the acquisition date. Management has determined that these trademarks have indefinite useful lives.

Trademark impairment reviews are performed at least annually and when events or changes in circumstances indicate a potential impairment. Any impairment is recognized immediately as an expense in item “Other income and expenses, net”. The carrying amount that has been subject to impairment is reviewed at each reporting date to verify possible reversals of the impairment and is recognized in the “other income and expenses, net” item.

iii) Concession rights

The intangible asset consisting of the right to charge users for the services related to service concessions agreements (Note 2.5 and Note 6.b) is initially recorded at the fair value of construction or improvement services and before amortization is started, an impairment test is performed; it is amortized under the straight-line method, from the date revenue starts using the lower of its estimated expected useful life or effective period of the concession agreement.

iv) Contractual relationships with customers

Contractual relationships with customers are assets resulting from business combinations that were initially recognized at fair value as determined based on the expected cash flows from those relations over a period based on the estimated permanent of the Group’s customer (the estimation of useful life is based on the term of the contract with customers which fluctuate between 5 and 9 years). The useful life and the impairment of these assets are individually assessed.

v) Cost of development wells

Costs incurred to prepare the wells to extract hydrocarbons from Blocks I and V are capitalized as part of the intangible asset. The Group capitalizes the costs of the development phase associated with wells preparation for extraction. The last investment made in these wells were in 2015. These costs are amortized based on the useful lives of the wells (5 years for the oil lots). The produced units method applies to license agreements for Blocks III and IV. In 2017, the Group has considered depreciation or amortization for the wells in Block IV based on produced units, as well as the tangible proportional part of the wells.

F-21

vi) Software and development costs

Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognized as intangible assets when the following criteria are met:

• technically feasible to complete the software product so that it will be available for use.

• management intends to complete the software product and use or sell it.

• there is the ability to use or sell the software product.

• it can be demonstrated how the software product will probably generate future economic benefits.

• technical, financial and other resources are available to complete the development and to use or sell the software product; and

• expenses incurred during its development can be reliably measured.

Other development costs that do not meet these criteria are recognized in the statement of income as incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period. Computer software development costs recognized as assets are amortized over their estimated useful lives, which fluctuate between 2 to 15 years.

vii) Land use rights

Refers to the rights maintained by the subsidiary Promotora Larcomar S.A. Land use of rights are stated at historical cost less amortization and any accumulated impairment losses. The useful life of this asset is based on the agreement signed (60 years) and may be extended if agreed by parties. Amortization will begin when it becomes ready for its intended use by Management.

2.16  Impairment of non-financial assets

Assets subject to amortization are subject to impairment tests when events or circumstances occur that indicate that their book value may not be recovered. Impairment losses are measured as the amount by which the book value of the asset exceeds its recoverable value. The recoverable value of the assets corresponds to the higher of its fair value and its value in use. For purposes of the impairment assessment, assets are grouped at the lowest levels in which they generate identifiable cash flows (cash-generating units). The book value of non-financial assets other than goodwill that have been subject to write-offs for impairment is reviewed at each reporting date to verify possible reversals of impairment.

2.17 Financial liabilities

The financial liabilities of the Group include trade accounts payable, accounts payable to related parties, remuneration and other accounts payable. All financial liabilities are initially recognized at fair value and subsequently valued at amortized cost using the effective interest rate method.

Financial liabilities are classified as current liabilities if the payment must be made within a year or less (or in the normal operating cycle of the business if it is greater). Otherwise, they are presented as non-current liabilities.

2.18 Trade accounts payable

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Accounts payable are initially recognized at their fair value and subsequently are amortized at amortized cost using the effective interest method, except for accounts payable within less than one year that are recorded at their nominal value that is similar to their fair value due to its maturity in the short term.

F-22

2.19 Other financial liabilities

Corresponds to the loans and bonds issued by the Group, which are initially recognized at their fair value, net of the costs incurred in the transaction. These financial liabilities are subsequently recorded at amortized cost; any difference between the funds received (net of transaction costs) and the redemption value is recognized in the statement of income during the period of the loan using the effective interest method.

The costs incurred to obtain these financial liabilities are recognized as transaction costs to the extent that it is probable that part or the entire loan will be received. In this case, these charges are deferred until the time the loan is received.

2.20 Borrowing costs

Debt costs are recognized at the statement of income in the period in which they have been incurred, except for intangible assets and inventories in which the borrowing costs are capitalized.

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualified assets, which are assets that necessarily take a substantial period (more than 12 months) to reach their condition of use or sale, are added to the cost of said assets until the period when the assets are substantially ready for use or sale. The Group suspends the capitalization of borrowing costs during the periods in which the development of activities of a qualified asset has been suspended. The income obtained from the temporary investment of specific loans that have not yet been invested in qualified assets is deducted from the borrowing costs eligible for capitalization.

2.21 Current and deferred income tax

Income tax expense comprises current and deferred tax. Tax expense is recognized in the statement of income, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, tax is also recognized in the statement of comprehensive income or directly in equity, respectively.

The current income tax is calculated based on the tax laws enacted at the date of the statement of financial position in the countries where the Company and its subsidiaries operate and generate taxable income. Management, where appropriate, establishes provisions based on amounts expected to be paid to the tax authorities.

Deferred tax is recognized on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred income tax is determined using tax rates (and legislation) that have been enacted as of the date of the statement of financial position and that are expected to be applicable when the deferred income tax is realized or paid.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Group, and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax arising from the initial recognition of goodwill is not recognized; likewise, the deferred tax is not recorded if it arises from the initial recognition of an asset or liability in a transaction that is not a business combination that does not affect the accounting or tax profit or loss at the time of the transaction.

F-23

2.22 Employee benefits

The Group recognizes a liability when the employee has rendered services in exchange for which is entitled to receive future payments and an expense when the Group has consumed the economic benefit from the service provided by the employee in exchange for the benefits in question.

The Group determines employee benefits in accordance with current labor and legal regulations and classifies them as short-term benefits, post-employment benefits, long-term benefits, and termination benefits.

Short-term benefits are those other than termination indemnities, whose payment is settled in the twelve months following the end of the period in which the employees have rendered the services; they correspond to current remunerations (salaries, wages and contributions to social security), annual paid and sick absences, participation in profits and incentives and other non-monetary benefits.

Post-employment benefits are those other than termination benefits that are paid after completing the period of employment with the entity. Retirement benefits or post-employment benefit plans can be classified into (i) Defined contribution plans and (ii) Defined benefit plans. The Group maintains defined benefit plans and therefore assumes the actuarial risk.

Long-term benefits are those benefits that must be paid more than twelve months after the end of the period in which the services were rendered. As of December 31, 2018, and 2019, the Group does not grant benefits in this category.

Termination benefits are those benefits payable as a result of (i) the entity’s decision to terminate the employee’s contract before the retirement date, and (ii) the employee’s decision to voluntarily accept the conclusion of the relationship of work.

Short-term benefits:

a) Current salaries and wages

The current remunerations are constituted by salaries, wages, contributions to social security, statutory bonuses and compensation for the time of services. Salaries, wages, and contributions to social security are settled on a monthly basis.

Entities of the Group recognize the expense and the related liability for statutory bonuses based on applicable laws and regulations effective in Peru, Chile, and Colombia. In Peru bonuses correspond to two monthly payments, settled one in July and one in December of each year, and accrue based on the consideration of the service.

The compensation for the time of service corresponds to the indemnification rights of the staff, and is accrued based on the consideration of the service calculated according to the legislation in force in each country in which the entities of the Group operate and determine as follows: (i) in Peru it is equivalent to half the remuneration in force at the date of payment through a deposit in bank the workers’ accounts in May and November of each year; (ii) In Colombia, it is equivalent to 8.33% of the monthly remuneration, (iii) In Chile this benefit is not available.

b) Annual paid absences

Annual holidays are recognized on an accrual basis. The provision for the estimated obligation for the annual vacations of personnel resulting from the services rendered by employees is recognized on the date of the consolidated statement of financial position and corresponds; (i) one month for personnel in Peru, (ii) fifteen days for personnel in Colombia, and (iii) in the case of Chile, they are subject to the worker’s seniority and range from fifteen to thirty days.

F-24

c) Workers’ profit sharing and incentives

The workers’ profit sharing is determined on the basis of the legal provisions in force in each country where the entities of the Group operate, as follows: (i) in Peru it is equivalent to 5% of the taxable base determined by each entity of the Group, in accordance with current income tax legislation, (ii) in Chile, workers’ participation is a component of the remuneration (equivalent to 4.75 minimum wages per year) and not a determinable percentage of the profit, (iii) in Colombia these benefits are not provided to employees.

Post-employment benefits

The indirect subsidiary Cam Chile Spa has a pension plan for its staff. The liability recognized in the statement of financial position with respect to defined benefit plan is measured based on the present value of the obligation at the end of the reporting period less the fair value of the planned assets.

The present value of the defined benefit obligations is determined by discounting the estimated future cash flows using the interest rates of high-quality corporate bonds denominated in the currency in which the benefits will be paid and with maturity periods similar to the obligations for pension plans. In countries where there is no market with instruments with similar characteristics, the market rate of government bonds will be used.

The remeasurements that arise from adjustments and changes in the actuarial assumptions are recorded in other comprehensive income in the period in which they arise.

Termination benefits

The Group entities recognize the liability and expense for severance payments when they occur, based on the legal provisions in force in each country. In accordance with the legislation of Peru, the compensation for arbitrary dismissal for personnel with an indefinite contract amounts to 1.5 times the monthly remuneration for each year worked.

In Colombian legislation, for the first year worked, the equivalent of 30 days of salary is granted, and from the second year on, the compensation will be the equivalent of 20 days of salary for each additional year (or the proportion); in the legislation of Chile is granted compensation of thirty days of salary for each year worked with a maximum salary of 330 days.

2.23 Provisions

a) General

Provisions are recognized when i) the Group has a present, legal or constructive obligation as a result of past events; ii) it is probable that an outflow of resources will be required to settle the obligation; and iii) the amount has been reliably estimated. Provisions are reviewed at year - end. If the time value of money is significant, provisions are discounted using a pre-tax rate that reflects, when applicable, the specific risks related to the liability. Reversal of the discount due to the passage of time results in the obligation being recognized with a charge to the statement of income as a financial expense.

Contingent obligations when their existence will only be confirmed by future events or their amount cannot be reliably measured. Contingent assets are not recognized and are disclosed only if it is probable that the Group will generate an income from economic benefits in the future.

b) Provision for the closure of production wells

The subsidiary GMP S.A. recognizes a provision for the closure of operating units that correspond to the legal obligation to close oil production wells once the production phase has been completed. At the initial date of recognition, the liability that arises from this obligation measured at its fair value and discounted at its present value, according to the valuation techniques established by IFRS 13, “Fair Value Measurement”, and is simultaneously charged to the intangible account in the consolidated statement of financial position.

F-25

Subsequently, the liability is increased in each period to reflect the financial cost considered in the initial measurement of the discount, and the capitalized cost is depreciated based on the useful life of the related asset. When a liability is settled, the subsidiaries recognize any gain or loss that may arise. The fair value changes estimated for the initial obligation and the interest rates used to discount the flows they are recognized as an increase or decrease in the book value of the obligation and the asset to which they relate to, any decrease in the provision, and any decrease of the asset that may exceed the carrying amount of said asset is immediately recognized in the consolidated statement of income.

If the review of the estimated obligation results in the need to increase the provision and, accordingly, increase the carrying amount of the asset, the subsidiaries should also take into consideration if the said increase corresponds to an indicator that the asset has been impaired and, if so, impairment tests are to be carried out (Note 2.16).

2.24 Put option arrangement

The subsidiary GyM S.A. signed a sale option contract on the equity of its subsidiary Morelco SAS (Note 32 a) that allows the shareholder to reallocate its shares over a period of 10 years. The amount payable under the option is initially recognized at the present value of the reimbursement under “Other accounts payable”, directly charged to equity. The charge to equity is recorded separately as put options subscribed on the non-controlling interest, adjacent to the non-controlling interest in the net assets of the consolidated subsidiaries.

Subsequently, the financial liability is updated by changes in the assumptions on which the estimation of the expected cash flows is based and by the financial component due to the passage of time. The effects of this update are recognized in results. In the event that the option expires without being exercised, the liability is written off with the corresponding adjustment to equity.

2.25 Capital

Common shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity, as a deduction, of the proceeds, net of taxes.

2.26 Revenue recognition from contracts with customers

Revenues from contracts with customers are recognized, for each performance obligation, either during a period of time or at a specific time, depending on which method best reflects the transfer of control of the underlying products or services to the obligation of particular performance with the client.

The Group recognizes the income through the application of the five steps defined in the regulation i) identification of the contract with the client; ii) identification of performance obligations in the contract; iii) determination of the price of the transaction; iv) allocation of the transaction price for performance obligations; and v) recognition of income when (or as) a performance obligation is satisfied.

Subsequently, the Group policy of recognition of each type of income according to IFRS 15:

i) Engineering and construction

Revenues from engineering and construction contracts are recognized over time as the Company performs its obligations because there is a continuous transfer of control of the deliverable to the customer pursuant to the terms of such contracts. For this reason, the Company accounts for revenue over time by measuring the progress towards complete satisfaction of its performance obligations under each contract. In this manner, revenues are accounted for using the percentage-of-completion method, based on surveys of performance by the Company’s experts who review the work performed to date under each contract.

F-26

The Company recognizes revenue based on surveys of work to date, using the output method, which is the direct measurement of the value to the customer of the construction services completed to date relative to the remaining services to be performed under the contract. The Company believes that the use of the output method based on surveys of performance provides a faithful depiction of the transfer of services by the Company to the customer because it reflects an enforceable right to payment from the Company for the work completed to date.

The contract generates assets when the costs incurred are greater than the cost associated with those revenues. Otherwise liabilities are generated for the accrued costs not invoiced. When it is probable that the total costs of the contract will exceed the related revenue, the expected loss is immediately recognized.

Revenues for additional work resulting from a modification or an instruction received from the customer to make a change in the scope of work or the price, or both, will result in an increase in contract revenue. The Company does not account for contract modifications unless approved by the customer. In addition, the Company reviews the enforceability of changes to the rights and obligations in contract modifications.

As part of its evaluation of whether changes to the rights and obligations in a contract modification are enforceable, the Company considers whether one or more of the following factors has been satisfied: a) the contract, applicable law or other evidence provides a legal basis for the modification; b) additional costs were caused by circumstances that were unforeseen on the date of execution of the contract and not a result of deficiencies incurred by the Company’s performance; c) modification-related costs are identifiable and considered reasonable in view of the work performed; or d) evidence supporting the modification is objective and verifiable. When one or more of the foregoing factors is satisfied, the changes to the rights and obligations in the contract modification are considered by the Company to be enforceable.

The Company estimates the change in the transaction price arising from the contract modification if the transaction price has not yet been approved by the customer in accordance with the requirements of IFRS 15 to estimate variable consideration. In order to include variable consideration related to a contract modification in the estimated transaction price, the Company must conclude that it is ‘highly probable’ that a significant revenue reversal will not occur. The Company determines the probability that the revenue reversal will occur (and therefore whether such price will be recovered) based on an analysis of whether any of the following factors is present: i) contractual entitlement; ii) past practices with the customer; iii) specific discussions or preliminary negotiations with the customer; and iv) verbal approval by the customer. If, as a result of such analysis, the Company concludes that it is ‘highly probable’ that a significant reversal in the amount of revenue recognized will not occur, it recognizes the variable consideration relating to the contract modification.

When the contract profit cannot be estimated reliably, the associated revenue is recognized to the extent of costs incurred are recoverable. Revenue is billed once approval is received by the owners of the work in progress.

The nature of certain of the Company’s contracts, namely cost-plus fee contracts in its E&C segment and unit price or similar contracts in its E&C segment and certain services it provides in its Infrastructure segment, give rise to variable consideration. Depending on the type of contract, this variable consideration may include reimbursable or target costs; variable number of units; award and incentive fees; and penalties. The Company estimates the amount of revenue to be recognized as variable consideration using the expected value method or the most likely amount method, whichever is expected to better predict the amount of consideration to which the Company will be entitled. These methods require the Company to estimate costs, unit quantities, award/incentive fees and penalties. In making such estimates, judgments are required to evaluate potential variances in the cost of materials, the cost of labor, productivity levels, the impact of change orders, liability claims and contract disputes, the achievement of contractual performance standards, and other contingencies.”

F-27

ii) Real-estate – Real estate, urban and industrial lots

Sale of Real estate

Revenue from sales of real estate properties is recognized when control over the property has been transferred to the client with the delivery record. Revenue is measured based on the price agreed under the contract. Until this is met, the incomes received will be counted as customer advances. These sales contracts have two performance obligations: i) the one corresponding to the transfer of the property, which includes the common areas of the building where these real estates are located, and ii) the one corresponding to the transfer of the common area outside the real estate assets but that are part of the real estate projects, which are recognized when the common area has been delivered.

Sale of urban lots

Revenue related to sales of urban lots is recognized when control over the property is transferred to the customer. Until this is met, the incomes received will be recognized as customer advances. Revenue is measured based on the transaction price agreed under the contract. These sales contracts have a single performance obligation for the sale of lots, which is executed upon delivery of the sale of the assets.

Sale of industrial lots

Revenue related to sales of industrial lots is recognized when control over the property has been transferred to the customer. Until this is met, the incomes received will be counted as customer advances. These sales contracts have two performance obligations: i) transfer of the industrial lot and ii) urban authorization of the industrial lot.

iii) Infrastructure

Revenue for provided services of oil and gas extraction, fuel dispatch and other services

The revenue from providing these services is recognized at the time the service is provided, calculating the service actually provided as a portion of the total services to be provided. This type of income has a single performance obligation; that is performed when the service is provided at a time moment.

Revenue from the sale of oil and derivative products

Revenue from the sale of goods is recognized when the control of the assets is transferred to the customer, which is when the goods are delivered. In this type of income there is only one performance obligation for the sale of oil; which is executed at the delivery of the goods.

Revenue from concession services

Revenues from concession services correspond to operation and maintenance services and are recognized according to their nature in the period in which the service is provided. In this revenue there is only one performance obligation, executed when the service is provided.

2.27 Recognition of cost and expenses

Engineering and construction contracts

Contract costs include all direct costs such as materials, labor, subcontracting costs, manufacturing and supply costs of equipment, start-up costs, depreciation and amortization, and indirect costs. Periodically, the Group evaluates the reasonableness of the estimates used in the determination of the total estimated contract cost. If, as a result of this evaluation, there are modifications to the revenue or cost previously estimated, or if the total estimated cost of the project exceeds expected revenues, an adjustment is made in order to reflect the effect in results of the period in which the adjustment or loss is incurred.

F-28

Costs for sale of oil and derivative products

The costs of the services rendered and the costs of sales of petroleum and derivative products are recognized when they are incurred, simultaneously with the recognition of related revenues. Other costs and expenses are recognized as they accrue, regardless of when they are paid and are recorded in the accounting periods to which they relate.

Costs for concession operation services

The costs of the operation and maintenance services are recognized when they are incurred, simultaneously with the recognition of related revenues. Other costs and expenses are recognized as they are accrued, regardless of when they are paid and are recorded in the accounting periods with which they are related.

2.28 Leases

Lease contracts are analyzed for the purpose of identifying those containing the characteristics according to IFRS 16 Leases (hereinafter “IFRS 16”) for recognition, measurement, presentation and disclosure.

The Group evaluates in every lease contract the following:

• If it has the right to control the use of the identified asses,

• If the contract term is longer than twelve months,

• If the underlying asset amount is a material amount, and,

• That the fees to be paid are not entirely variable.

a) Leases in which the Group is a lessee

The Group recognizes a right-of-use asset and a lease liability as of the beginning of the lease.

The right-of-use asset is initially measured by the initial amount of the lease liability adjusted for any lease payment made on or before the start date, plus the initial direct costs incurred. The right-of-use assets are depreciated in a straight line, from the start date until the end of the lease contract. The term of the lease includes the periods covered by an option to extend the contract if the Group is reasonably sure to exercise that option.

The lease liability is the total unpaid installments, measured at amortized cost using the effective interest method. It is measured again when there is a change in future lease payments that arise from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be paid under a residual value guarantee, or if the Group changes its assessment of whether it is sure that it will exercise a purchase, extension or term option.

When the lease liability is measured again, the carrying amount of the right-of-use asset is adjusted.

In the engineering and construction segment, interest expenses related to leasing contracts of the core business are reported in the gross margin; the rest of the group segments, report them in financial expenses.

Operational cash flows will be greater since cash payments for the main portion of the lease debt are classified within the financing activities. Only the part of the payments that reflects interest can continue to be presented as operating cash flow.

F-29

b) Leases in which the Group is a lessor

Liabilities for operating leases and assets are included in the statement of financial position according to the nature of the asset. Revenues from operating leases are recognized in a straight line over the term of the lease agreement and the incentives granted to lessees are reduced from rental income.

Based on the foregoing, the Group as lessor has not changed the recognition of its leases.

c) Treatment before the implementation of IFRS 16

Leases in which the Group is a lessee

Operating leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases, including prepayments (net of any incentives received from the lessor) are recognized in the consolidated income statement under the straight-line method over the lease term. The Group’s major kinds of operating leases are leases of machinery, computer equipment, printing equipment, among others.

Finance leases

Leases in which the Group substantially assumes all the risks and rewards of ownership of an asset are classified as finance leases. Each lease payment is allocated between the liability and finance charges to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The corresponding rental obligations, net of finance charges, are included in other payables, short- and long-term in the consolidated statement of financial position. The interest element of the finance cost is charged to the consolidated income statement of over the lease periods to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the useful life of the asset or the lease term.

2.29 Dividend distribution

Dividend distribution to the Group shareholders is recognized as a liability in the financial statements in the period in which the dividends are approved.

2.30 Significant non-operating items

Significant non-operating items are separately shown in the financial statements when they are necessary to provide an adequate understanding of the Group’s financial performance. These material items are income or expenses shown separately due to their nature or significant amount.

2.31 Discontinued operations as of December 31, 2017 and December 31, 2018

a) Restatement of the Statement of Income as of December 31, 2017 (was restructured in the 2018 annual report, presented on April 30, 2019)

The consolidated statement of income for the year ended December 31, 2017 included the net gain on the sale of our former subsidiary GMD (S/218.3 million, equivalent to US$64.6 million) under the “Gain from the sale of investments” line item, rather than the “Profit from discontinued operations” line item, in accordance with IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, such amount has been restated in application of IFRS 5 paragraph 33 a).

	2017 Audited			Restatement GMD			Reclassification discontinued operations (*)			2017 Restated and Reclassified
Revenues		6,080,142			—			(2,066,129	)		4,014,013
Operating costs		(5,407,355	)		—			1,895,794			(3,511,561	)
Gross profit (loss)		672,787			—			(170,335	)		502,452
Administrative expenses		(429,181	)		—			106,727			(322,454	)
Other (expenses) income, net		(20,545	)		—			(12,324	)		(32,869	)
Gain (loss) from the sale of investments		274,363			(218,264	)		(21,554	)		34,545
Operating profit (loss)		497,424			(218,264	)		(97,486	)		181,674
Financial expenses		(185,445	)		—			34,668			(150,777	)
Financial income		15,407			—			(1,665	)		13,742
Share of the profit or loss in associates and joint ventures		1,327			—			(854	)		473
Profit (loss) before income tax		328,713			(218,264	)		(65,337	)		45,112
Income tax		(123,037	)		63,940			12,792			(46,305	)
Profit (loss) from continuing operations		205,676			(154,324	)		(52,545	)		(1,193	)
Profit from discontinued operations		3,562			154,324			52,545			210,431
Profit of the year		209,238									209,238
Earnings per share attributable to owners of the Company during the year		0.225									0.225
Earning (loss) per share from continuing operations attributable to owners of the Company during the year		0.220									(0.101	)

(*) Corresponds to financial result from discontinued operations, Stracon GyM S.A., CAM Servicios del Peru S.A., CAM Chile S.A. and Adexus S.A.

F-30

b) Reclassified discontinued operations as of December 31, 2018

As a result of the divestment process, the results of discontinued operations are reclassified as follows:

	2018 Audited			Reclassification discontinued operations			2018 Reclassified
Profit for the year		57,415			—			57,415
Other comprehensive income:
Items that will not be reclassified to profit or loss
Remeasurement of actuarial gains and losses, net of tax		16,589			—			16,589
Items that may be subsequently reclassified to profit or loss
Cash flow hedge, net of tax		119			—			119
Foreign currency translation adjustment, net of tax		5,733			—			5,733
Exchange difference from net investment in a foreign operation, net of tax		(8,147	)		—			(8,147	)
		(2,295	)		—			(2,295	)
Other comprehensive income for the year, net of tax		14,294			—			14,294
Total comprehensive income for the year		71,709			—			71,709
Comprehensive income attributable to:
Owners of the Company		(67,548	)		—			(67,548	)
Non-controlling interest		139,257			—			139,257
		71,709			—			71,709
Comprehensive income attributable to owners of the Company:
Continuing operations		(98,942	)		(32,342	)		(131,284	)
Discontinued operations		31,394			32,342			63,736
		(67,548	)		—			(67,548	)

3 STANDARDS, AMENDMENTS, AND INTERPRETATION ADOPTED IN 2019

3.1 Current standards, amendments, and interpretations adopted

The following current standards, amendments to the policies and interpretations were adopted by the Group on January 1, 2019.

a) IFRS 16 “Leases”

This standard replaces the accounting treatment of leases under IAS 17 “Leases” and IFRIC 4 “Determination of whether an agreement contains a lease” and other related interpretations.

IFRS 16 was implemented as of January 1, 2019 and the Group applied the modified retrospective approach, so that comparative information has not been restructured, recognizing on the date of initial application an amount of asset per right of use equal to lease liability; adjusted for the amount of any payment for early or accrued lease, related to leases recognized in the consolidated statement of financial position.

IFRS 16 eliminates the current difference between operating and finance leases and requires the recognition of an asset (the right to use the leased asset) and a financial liability for the payment of income, this for virtually all lease agreements. There is an optional exemption for short-term and low-value leases.

The income statement will also be affected because the total expenditure is normally higher in the first years of the lease and lower in recent years. In addition, operating expenses will be replaced by interest and depreciation expenses, so key metrics such as EBITDA will change.

The accounting by the lessors will not change significantly.

F-31

Impact on the financial statements

In the adoption of IFRS 16, the Group recognized liabilities related to leases that have been previously classified as operating leases under IAS 17. These liabilities have been measured based on the present value of the remaining future payments, discounted using a rate of incremental interest as of January 1, 2019 (7.3% average interest rate).

As a result of the effect of the transition of IFRS 16, right-of-use assets and liabilities for S/97.7 million were recognized as of January 1, 2019 (representing 1.33% and 2.15% of total assets and liabilities, respectively). As part of the initial application of IFRS 16, the Company used the modified retrospective method, therefore, the financial statements for previous years were not modified.

At December 31, 2019, the effect of IFRS 16 in the Group’s financial statements is detailed as follows:

Impact on assets	At December 31, 2019
Right-of-use
Right-of-use buildings		59,599
Right-of-use vehicles		20,211
Right-of-use machinery		17,896
Impact of implementation 2019		97,706
Adjustments on contract fees		4,039
Total right-of-use assets		101,745
Cumulative depreciation		(22,958	)
Foreign currency translation effect		26
Impact on assets (Note 16.2)		78,813

At the end of 2019, the Group’s companies with the most representative balances were GMP S.A. (S/24 million) and Graña y Montero S.A.A. (S/54 million).

Impact on liabilities	At December 31, 2019
Impact of implementation 2019		97,706
Adjustments on contract fees		4,039
Addition of liabilities for right-of-use		101,745
Accrued interest		5,617
Amortization		(20,326	)
Interest paid		(5,368	)
Foreign currency translation effect		(11	)
Exchange difference		(1,441	)
Impact on liabilities		80,216
Short-term liabilities for right-of-use		18,246
Long-term liabilities for right-of-use		61,970
Impact on liabilities (Note 18)		80,216

b) IFRIC 23 “Uncertainty over income tax treatments”

F-32

IFRIC 23 Uncertainty regarding income tax treatments (hereinafter “IFRIC 23”), describe the assessment you must comply with when there is a tax treatment for which you are uncertain about whether or not to be accepted by the tax administration, according to the interpretation of tax legislation. If the company identifies uncertain tax treatments, the effect of the uncertainty must be identified through a provision of the current income tax or the deferred income tax, whichever is applicable.

The Group adopted IFRIC 23 from January 1, 2019. This rule regulates how to determine the accounting record of a tax position when there is uncertainty about income tax treatments.

The interpretation requires the Group to determine whether uncertain tax positions are assessed separately or in groups; and assess whether a tax authority is likely to accept uncertain tax treatment to be used by an entity in its income tax returns.

If tax authority accepts, the Group must determine its tax position in a manner consistent with the tax treatment used or intended to be used in its tax returns. If not, the Group must reflect the effect of uncertainty in determining its tax position using the most probable amount method or the expected value method.

Uncertain tax positions have been evaluated separately in each Group company and have been identified as the best method the most likely amount. Based on the foregoing, the Group has recognized an income tax accrual of S/0.5 million and a decrease in deferred income tax assets of S/1 million, affecting the retained earnings on S/1.5 million. Due to the aforementioned tax uncertainty, there is a possibility that, at the end of the processes of the years open to the audit, the final result may differ from what was originally assessed.

3.2 Standards and amendments issued to be adopted at a later date

a) International Financial Reporting Standard 17 (IFRS 17 “Insurance Contracts”), effective as of January 1, 2021. It has no impact on the Group.

b) Amendments to the Rules

The following amendments to IFRS have been issued and are applicable to the Group for its annual periods as of January 1, 2020:

• Modification to references to the Conceptual Framework of International Financial Reporting Standards (IFRS), effective as of January 1, 2020.

• Definition of a Business (Amendments to IFRS 3 “Business Combinations”), effective as of January 1, 2020.

• Definition of Materiality (Amendments to IAS 1 “Presentation of Financial Statements” and IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”), effective as of January 1, 2020.

• Sale or contribution of assets between an investor and its associate or joint arrangement, with no defined effective date, but its application is optionally allowed.

The Group has not adopted the amendments and modifications in advance and is not expected to have an impact on current or future reporting periods and foreseeable future transactions.

4 FINANCIAL RISK MANAGEMENT

Financial risk management is carried out by the Group’s Management. Management oversees the general management of financial risks, such as foreign exchange rate risk, price risk, cash flow, and fair value interest rate risk, credit risk, the use of derivative and non-derivative financial instruments and the investment of excess liquidity, which are supervised and monitored periodically.

F-33

4.1 Financial Risk Factors

The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk, fair value interest rate risk and cash flow interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial performance. The Group uses derivative financial instruments to hedge certain risk exposures in one of its subsidiaries and considers the use of other derivatives in the event that it identifies risks that may generate an adverse effect for the Group in the short and medium-term.

a) Market risks

i) Foreign exchange risk

The Group is exposed to exchange rate risk as a result of the transactions carried out locally in foreign currency and due to its operations abroad. As of December 31, 2018, and 2019 this exposure is mainly concentrated in fluctuations of U.S. dollar, the Chilean and Colombian Pesos.

At December 31, 2018 and 2019, the consolidated statement of financial position includes the following:

	2018				2019
	S/(000)		USD(000)		S/(000)		USD(000)
Assets		2,273,132		674,753		2,859,324		862,021
Liabilities		2,042,176		604,383		1,751,479		528,031

The Group’s exchange gains and losses for the Peruvian Sol, the Chilean and Colombian Pesos exposure against the U.S. dollar was:

	2017			2018			2019
Gain		329,751			382,104			390,008
Loss		(323,927	)		(405,380	)		(422,578	)

If at December 31, 2019 the Peruvian Sol, the Chilean and Colombian Pesos had strengthened/weakened by 2% against the U.S. dollar, with all other variables held constant, the pre-tax results for the year would have increased/decreased by S/0.7 million (S/0.5 million in 2018 and S/0.1 million in 2017).

The consolidated statement of changes in equity comprises a foreign currency translation adjustment originated by its subsidiaries. The consolidated statement of financial position includes assets and liabilities in functional currency equivalent to (in thousands):

	2018				2019
	Assets		Liabilities		Assets		Liabilities
Chilean Pesos		48,129,848		49,728,313		19,915,617		39,193,917
Colombian Pesos		163,560,697		76,978,655		187,119,204		76,446,723

The Group’s foreign exchange translation adjustment in 2019 was negative by S/8.2 million (positive by S/5.7 million in 2018 and negative by S/11.3 million in 2017).

F-34

ii) Price risk

Management considers that the exposure of the Group to the price risk of its investments in mutual funds, bonds, and equity securities is low since the invested amounts are not significant. Any fluctuation in their fair value will not have any significant impact on the balances reported in the consolidated financial statements.

iii) Cash flow and fair value interest rate risk

The Group’s interest rate risk mainly arises from its long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. Group policy is to maintain most of its borrowings at fixed rate instruments; 61.8% of total debt in 2019 (46.9% in 2018) was contracted at fixed rates and 38.2% at variable rates (53.1% in 2018) which consisted of a 37.7% fixed rate plus VAC (adjusted for inflation) and the remaining 0.5% at a variable rate (27.7% fixed rate + VAC and the remaining 25.4% at a variable rate in 2018).

The debt subject to fixed rate plus VAC is related to a bond issued in Peruvian Sol to finance the GyM Ferrovias Project, Metro Line 1 (Note 19). Any increase in the interest rate resulting from higher inflation will have no significant impact on the Group’s profit because these revenues are also adjusted for inflation.

During 2018 and 2019 borrowings at variable rates are denominated in Peruvian Sol, and U.S. dollars and the Group’s policy is to manage their cash flow risk by using interest-rate swaps, which are recognized under hedge accounting. In 2018, the variable rate loans related to GSP (Note 18 a-ii), were not hedged, Management decided to assume the risk since it was expected to pre-pay them before due.

If on December 31, 2019, if the Libor rate plus three months had increased/decreased by 5%, with all other variables held constant, the pre-tax results for the year would have increased/decreased by S/0.01 million (S/0.75 million in 2018). In 2019 and 2018 there was no significant ineffectiveness in the cash flow hedge.

b) Credit risk

Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as customer credit counterparties, including the outstanding balance of accounts receivable and committed transactions. For banks and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted.

Concerning to loans to related parties, the Group has measures in place to ensure the recovery of these loans through the controls maintained by the Corporate Finance Management and the performance evaluation conducted by the Board.

Management does not expect the Group to incur any losses from the performance by these counterparties, except for the ones already recorded at the financial statements.

c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents, the availability of funding through an adequate number of sources of committed credit facilities and the capacity to close out positions in the market. Historically, the Group cash flows enabled it to maintain sufficient cash to meet its obligations. However, since 2017, the Group experienced liquidity problems due to the early termination of the GSP concession agreement and the obligations assumed (Note 15 a-i). As a consequence, the Group started a disinvestment plan to be able to meet the obligations resulting from this scenario (Note 36). This plan was met and the GSP debt was terminated. Due to the Covid 19 pandemic as explained in note 37, the Group has considered measures to reduce risk exposure and has implemented a new plan in order to meet its requirements of cash for the different businesses.

F-35

Group Corporate Finance monitors rolling forecasts of the Group’s liquidity requirements to ensure it exists sufficient cash to meet operational needs so that the Group does not breach borrowing limits or covenants, where applicable, on any of its borrowing facilities. Less significant financing transactions are controlled by the Finance Management of each subsidiary.

Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal ratio targets in the statement of financial position and, if applicable, external regulatory or legal requirements, for example, foreign currency restrictions.

Surplus cash held by the operating entities over the balance required for working capital management is invested in interest-bearing checking accounts or time deposits, selecting instruments with appropriate maturities and sufficient liquidity.

The table below analyzes the Group’s financial liabilities into relevant maturity groupings based on the remaining period from the date of the consolidated statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

	Less than 1 year		1-2 years		2-5 years		More than 5 years		Total
At December 31, 2018
Other financial liabilities (except for finance leases)		816,122		273,079		129,233		41,577		1,260,011
Finance leases		15,151		7,489		14,094		—		36,734
Bonds		111,080		153,287		355,667		1,174,404		1,794,438
Trade accounts payables (except non-financial liabilities)		980,723		—		—		—		980,723
Accounts payables to related parties		55,941		21,849		—		—		77,790
Other accounts payables (except non-financial liabilities)		116,806		17,777		338,627		—		473,210
Other non-financial liabilities		—		61		—		—		61
		2,095,823		473,542		837,621		1,215,981		4,622,967

	Less than 1 year		1-2 years		2-5 years		More than 5 years		Total
At December 31, 2019
Other financial liabilities (except for finance leases and lease liability for right-of-use asset)		479,000		147,473		177,018		—		803,491
Finance leases		10,826		3,467		13,346		—		27,639
Lease liability for right-of-use asset		24,966		38,788		31,167		7,603		102,524
Bonds		115,690		157,516		358,461		1,077,960		1,709,627
Trade accounts payables (except non-financial liabilities)		966,620		—		—		—		966,620
Accounts payables to related parties		38,916		21,747		—		836		61,499
Other accounts payables (except non-financial liabilities)		200,098		2,505		194,908		—		397,511
Other non-financial liabilities		—		52		—		—		52
		1,836,116		371,548		774,900		1,086,399		4,068,963

4.2 Capital management risk

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure to minimize the cost of capital. In 2017 the situation of the Group had lead Management to monitor deviations that might cause the non-compliance of covenants and may hinder the renegotiation of liabilities (Note18-a). In extraordinary events as explained in note 37, the Group identifies the possible deviations and requirements and establishes a plan.

F-36

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The Group monitors capital based on the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including current and non-current borrowings), less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated statement of financial position plus net debt.

As of December 31, 2018, and 2019, the gearing ratio is presented below indicating the Group’s strategy to keep it in a range from 0.10 to 0.70.

	2018			2019
Total financial liabilities and bonds		2,139,714			1,723,108
Less: Cash and cash equivalents		(801,140	)		(948,978	)
Net debt		1,338,574			774,130
Total equity		2,489,931			1,876,085
Total capital		3,828,505			2,650,215
Gearing ratio		0.35			0.29

4.3 Fair value estimation

For the classification of the type of valuation used by the Group for its financial instruments at fair value, the following levels of measurement have been established.

• Level 1: Measurement based on quoted prices in active markets for identical assets or liabilities.

• Level 2: Measurement based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

• Level 3: Measurement based on inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs, generally based on internal estimates and assumptions of the Group).

The table below shows the Group’s assets and liabilities measured at fair value on December 31, 2018, and 2019:

	Level 2
At December 31, 2018
Financial liabilities
Derivatives used for hedging		61
At December 31, 2019
Financial liabilities
Derivatives used for hedging		52

4.4 COVID-19 Pandemic

As a result of the outbreak of Coronavirus 2019 (COVID-19), the Group’s results of operations, financial positions and cash flows have been adversely affected as of the date of this report with potential impacts on subsequent periods, including but not limited to the significant decline in revenue and significant operating cash flow. The impacts may also include additional allowance for doubtful accounts and impairment to the Group’s long-term assets. Because of the significant uncertainties surrounding the COVID-19, the exact financial impact is unpredictable and will depend on future developments, including new information which may emerge concerning the duration of the lockdown which has been extended until June 30th for Perú, until September 18th for Chile and until August 31st for Colombia, the actions taken by authorities and other entities to contain the COVID-19 outbreak, among others, all of which are beyond the Group’s control. The Group will continue to closely monitor the impacts of COVID-19 through the course of the year 2020.

From mid-March until the end of May 2020, substantially all of our engineering and construction and real estate projects in Perú were mandatorily shut down, however, as part of the Government plan to activate some industries by stages, most of our projects of our engineering and construction and real estate segments are gradually resuming. In Colombia the projects under execution were declare as essential projects therefore they continued operating since the beginning of the lockdown. Finally our projects in Chile were shut down but only for few days, after which they resume operations. Our infrastructure operations, were declared essential businesses, therefore have continue operating.

F-37

On the liquidity side, the Company has implemented a plan that includes several measures to reduce expenses and preserve cash in response to the ongoing COVID-19 pandemic, including the following: (i) developing a 12-week cash plan, project-by-project, to ensure that the Company will continue to meet its critical obligations during that period, which plan is monitored and updated weekly; (ii) preparing a cash plan for the remainder of the 2020 fiscal year, to identify in advance key liquidity issues that may arise; (iii) identifying and renegotiating certain of the company’s obligations with respect to its suppliers, banks and other third parties; (iv) identifying and reducing non-essential general expenses across the group; (v) reducing headcount, and temporarily reducing salaries of senior management, across the company’s three segments; and (vi) reducing capital expenditures across the company’s subsidiaries. In addition the Group is evaluating the selling of minor assets that will help finance any deficit during the year.

5 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Estimates and judgments used are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. These estimates are based on information available through the date of the issuance of the financial statements. Therefore, actual results could differ from those estimates.

5.1 Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates are based on information available through the date of issuance of the financial statements, therefore, actual results could differ from those estimates. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

a) Estimated impairment of goodwill and other intangible assets with an indefinite useful life

Impairment reviews are undertaken annually to determine if goodwill arising from business acquisitions and other intangible assets with indefinite useful life are impaired, in accordance with the policy described in Note 2.15-i). For this purpose, goodwill is allocated to the different Cash Generating Unit (“CGU”) to which it relates while other intangible assets with indefinite useful life are assessed individually. The recoverable amounts of the CGU and of other intangible assets with indefinite useful life have been determined based on the higher of their value-in-use and fair value less costs to sell. This evaluation requires the exercise of Management’s professional judgment to analyze any potential indicators of impairment as well as the use of estimates in determining the value in use, including preparing future cash flows, macro-economic forecasts as well as defining the interest rate at which said cash flows will be discounted.

F-38

If the Group experiences a significant drop in revenues or a drastic increase in costs or changes in other factors, the fair value of their business units might decrease. If management determines that the factors reducing the fair value of the business are permanent, those economic factors will be taken into consideration to determine the recoverable amount of those business units and therefore, goodwill, as well as other intangible assets with indefinite useful life may be deemed to be impaired, which may cause their write-down.

In accordance with the impairment evaluations carried out by Management, losses due to impairment of goodwill and trademarks have been recognized by the decrease in the expected flows because of a reduction of the contracts’ “backlog”.

At December 31, 2018, and 2019 the Group has performed a sensitivity analysis increasing or decreasing the assumptions of gross margin, discount rate, and revenue and terminal growth rate by a 10%, with all the other variables held constant, as follows:

	Difference between recoverable amount and carrying amounts
	2018					2019
Goodwill
Gross margin		(10	%)	+10	%		(10	%)	+10	%
Engineering and construction		0.51	%	41.12	%		(25.54	%)	(4.25	%)
Electromechanical		(9.73	%)	38.89	%		35.63	%	52.97	%
Discount rate:		(10	%)	+10	%		(10	%)	+10	%
Engineering and construction		39.19	%	6.65	%		(4.30	%)	(23.09	%)
Electromechanical		29.36	%	2.97	%		48.89	%	39.92	%
Terminal growth rate:		(10	%)	+10	%		(10	%)	+10	%
Engineering and construction		18.48	%	23.30	%		(16.31	%)	(13.38	%)
Electromechanical		12.90	%	16.34	%		42.36	%	46.32	%
Trademarks
Revenue growth rate:		(10	%)	+10	%		(10	%)	+10	%
Morelco		75.00	%	116.27	%		22.14	%	60.11	%
Vial y Vives - DSD		27.40	%	55.71	%		110.69	%	72.38	%
Discount rate:		(10	%)	+10	%		(10	%)	+10	%
Morelco		126.00	%	72.33	%		63.02	%	23.56	%
Vial y Vives - DSD		29.54	%	55.99	%		78.72	%	106.64	%
Terminal growth rate:		(10	%)	+10	%		(10	%)	+10	%
Morelco		91.70	%	99.82	%		37.49	%	44.02	%
Vial y Vives - DSD		38.99	%	44.26	%		88.07	%	95.20	%

In 2019, if the gross margin, discount rate or terminal growth rate had been 10% below or 10% above Management’s estimates, the Group would not have recognized a provision for impairment of goodwill in the Electromechanical CGU (GMA); however, at the same variation, the Group would have to recognized a provision for impairment of the Engineering and Construction (Morelco). In 2018, if the discount rate or terminal growth rate had been 10% below or 10% above Management’s estimates, the Group would not have recognized a provision for impairment of goodwill; however, at the same variation in gross margin, the Group would have to recognized a provision for impairment of the Electromechanical GMA.

As a result of these assessments, as of December 31, 2019, an impairment of the goodwill in Morelco was identified and recorded in the Engineering and Construction CGU. In 2018, it was not necessary to record an impairment provision. (Note 17).

F-39

In 2018 and 2019, if the revenue growth rate, terminal growth rate or the discount rate had been 10% below or had been 10% above Management’s estimates, the Group would have not recognized a provision for impairment in trademarks.

At December 31, 2019, as a result of these evaluations, a reversal of goodwill impairment was identified and recorded in the Engineering and Construction CGU, trademark impairment in Vial y Vives-DSD. In 2018, it was not necessary to record an impairment provision (Note 17).

b) Income taxes

Determination of the tax obligations and expenses requires interpretations of the applicable tax laws and regulations. The Group seeks legal and tax counsel before making any decision on tax matters.

Deferred income tax assets and liabilities are calculated on the temporary differences arising between the tax basis of assets and liabilities and the amounts stated in the financial statement of each entity that makes up the Group, using the tax rates in effect in each of the years in which the difference is expected to reverse. Any change in tax rates will affect the deferred income tax assets and liabilities. This change will be recognized in the consolidated statement of income in the period in which the change takes effect.

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which deductible temporary differences and tax loss carryforwards can be utilized. For this purpose, the Group takes into consideration all available evidence, including factors such as historical data, projected income, current operations, and tax planning strategies. A tax benefit related to a tax position is only recognized if it is more likely than not that the benefit will ultimately be realized.

As of December 31, 2019, the Group’s possible maximum exposure to tax contingencies amount to S/71.4 million (S/15.7 million in 2018).

The income tax for the year includes Management’s evaluation of the amount of taxes to be paid in uncertain tax positions, where the liabilities have not yet been agreed with the tax administration.

c) Percentage of completion revenue recognition

Revenues from engineering and construction contracts are recognized by the percentage of completion method, which requires estimating the margin that will be obtained prior to the culmination of works. Projections of these margins are determined by management based on their estimated budgets execution and adjusted periodically to reflect actual performance as work is completed. In this regard, management believes that the estimates made at the end of the year are reasonable. When changes occur that were not approved in a project’s original scope of work, income is recognized as equivalent to the cost incurred (i.e. no profit is recognized) until such changes have been approved.

Contract revenue and cost related to contracts are recognized in the company’s consolidated statement of comprehensive income in the accounting periods in which the work was executed. Costs related to the construction contract costs are recognized as works in the consolidated comprehensive income in the accounting periods in which the work was executed. However, any expected and likely cost overruns related to the contract over total expected income under the contract is recognized as an expense immediately. In addition, any change in the estimates under the contract is recognized as a change in accounting estimates in the period in which the change is made and future periods if applicable. In certain construction contracts, the terms of these agreements allow to retain an amount to customers until it culminates with construction. Under these contracts, the total amount cannot be recognized until the construction is finished.

F-40

As of December 31, 2017, 2018 and 2019, a sensitivity analysis was performed considering a 10% increase/decrease in the Group’s gross margins, as follows:

	2017			2018			2019
Revenues		2,214,108			1,961,100			2,411,880
Gross profit		106,902			32,685			60,317
%		4.83			1.67			2.50
Plus 10%		5.31			1.84			2.75
Increase in profit before income tax		10,667			3,399			6,010
		117,569			36,084			66,327
Less 10%		4.35			1.50			2.25
Decrease in profit before income tax		(10,667	)		(3,399	)		(6,010	)
		96,235			29,286			54,307

d) Provision for well closure costs

At December 31, 2019, the present value of the estimated provision for the closure of 189 wells located in Talara amounted to S/50.1 million (S/20.3 million as of December 31, 2018, for the closure of 158 wells). The well closure liability is adjusted to reflect the changes that resulted from the passage of time and from reviews of either the date of occurrence or the amount of the present value of the originally estimated obligations (Note 17-d).

The Group estimates the present value of its future obligation for well closure costs, or well closure liability, and increases the carrying amount of the asset that will be withdrawn in the future and that is shown under the heading of intangibles in the consolidated statement of financial position.

The pre-tax discount rate used for the present value calculation was 1.58% for Block I and 1.66% for Block V (2.46% for block I and 2.51% for block V for the year 2018), and 2.33% for Blocks III and IV, (2.98% for the year 2018) based on 3, 5 and 30-year rate used on U.S. bonds effective at December 31, 2018 and 2019.

If on December 31, 2018, and 2019, the estimated rate had increased or decreased by 10%, with all variables held constant, the impact on pre-tax profit would not have been significant.

e) Impairment of investment in associate and account receivable to Gasoducto Sur Peruano S.A. (GSP)

Based on the termination of the concession agreement, on which Gasoducto Sur Peruano S.A. (GSP) acts as concessionaire (Note 15 a-i), as well as the agreements taken at the end of the year, the Group identified potential impairment indicators affecting the recoverability of its investment. Consequently, the Group impaired the full investment amount.

In that process, the Group has applied judgment to weight the various uncertainties surrounding the amount that can be recovered from this investment. Management has determined the recoverable amount assuming the following key factors: (i) the amount that GSP will recover as a result of a possible public auction, (ii) the liquidation of the company via the GSP Creditor´s meeting, and (iii) the validity of its right to subordinate the Odebrecht Group’s debts in GSP.

The calculation of the impairment estimate assumes a process of liquidation of GSP in accordance with Peruvian legislation, whereby the value of the asset to be recovered is first applied to the payments of liabilities in the different categories of creditors and the remainder, if it is the case, to the payment of the shareholders, taking into account the existing subordination agreements.

F-41

As of December 31, 2018 in relation to the amount to be recovered by GSP, the Group is assuming a recovery of the minimum amount established in the concession agreement, which is equivalent to 72.25% of the Net Carrying Amount (NCA) of the Concession assets. This amount, in substance, represents a minimum payment to be obtained by GSP based on a public auction (liquidation) to be set up for the adequate transfer of the Concession’s assets to a new Concessionaire, under the relevant contractual terms and conditions. Additionally, given the situation of non-compliance by the Peruvian State and the situation in which the process of forming the creditors’ meeting was, and according to the opinion of lawyers for similar cases, the term for five years was estimated the recovery of the account receivable.

As of December 31, 2019, as a result of events that occurred during 2019, certain assumptions were changed with respect to the company’s estimated recovery of the net carrying amount (valor contable neto) of GSP. In December 2019, as mentioned in note 1, the Group signed a preliminary settlement and cooperation agreement with Peruvian authorities, and in addition, the creditors’ meeting of GSP remains delayed. Consequently, any legal actions that GSP could initiate in order to collect have also been postponed, and therefore the time expected for the collection of the receivables has increased. As a result, we have estimated a period of 8 years to collect the receivables, and that GSP was likely to recover 50% of the net carrying amount.

5.2 Critical judgments in applying the accounting policies

Consolidation of entities in which the Group holds less than 50%

The Group owns some direct and indirect subsidiaries of which the Group has control even though it has less than 50% of the voting rights. These subsidiaries mainly comprise indirect subsidiaries in the real estate business owned through Viva GyM S.A., having the power to affect the relevant activities that impact the subsidiaries’ returns, even though the Group holds interest between 30% and 50%. Additionally, the Group has control de facto by a contractual agreement with the majority investor over Promotora Larcomar S.A. of which it owns 46.55% of the equity interest.

Consolidation of entities in which the Group does not have joint control but holds rights and obligations over the assets and liabilities

The Group assesses, on an ongoing basis, the nature of the contracts signed with one or more parties. If no control or joint control is determined to be held by the Group, but it has rights over assets and obligations for liabilities under the arrangement, then the Group recognizes its assets, liabilities, revenue and expenses and its share of any jointly controlled assets or liabilities and any revenue or expense arising under the arrangement as a joint operation in accordance with IFRS 11 - Joint arrangements (Note 2.2-d).

6. INTERESTS IN OTHER ENTITIES

The consolidated financial statements include the accounts of the Group and its subsidiaries. Additionally, the consolidated financial statements of the Group include its interest in joint operations in which the Company or certain subsidiaries have joint control with their partners (Note 2.2-d).

a) Main subsidiaries

The following table shows the principal direct and indirect subsidiaries classified by operating segment (Note 7):

Name	Country	Economic activity
Engineering and Construction:
GyM S.A.	Peru, and Colombia	Civil construction, electro-mechanic assembly, buildings management and implementing housing development projects and other related services.
GyM Chile S.p.A.	Chile	Investment funds, investment companies and similar financial entities.

F-42

Vial y Vives - DSD S.A.	Chile	Construction engineering projects, civil construction and related technical consultancy, rental of agricultural machinery and equipment, forestry, construction and civil engineering without operator.
GMI S.A.	Peru, Mexico, and Bolivia	Advisory and consultancy services in engineering, carrying out studies and projects, managing projects and supervision of works.
Morelco S.A.S.	Colombia and Ecuador	Providing construction and assembly services, supply of equipment and materials, operation and maintenance and engineering services in the specialties of mechanics, instrumentation and civil works.
Infrastructure:
GMP S.A.	Peru	Oil and oil by-products extraction, operation and exploration services, as well as providing storage and fuel dispatch services.
Oiltanking Andina Services S.A.	Peru	Operation of the gas processing plant of Pisco - Camisea.
Transportadora de Gas Natural Comprimido Andino S.A.C.	Peru	Supply, process and market natural gas and its derivative products.
Concar S.A.	Peru	Highway and roads concessions operation and maintenance.
GyM Ferrovias S.A.	Peru	Concession for the operation of the public transportation system of Lima Metro (Metro de Lima Metropolitana).
Survial S.A.	Peru	Concession for constructing, operating and maintaining Section 1 of the “Southern Inter-oceanic” highway.
Norvial S.A.	Peru	Concession for restoring, operating and maintaining the “Ancon - Huacho - Pativilca” section of the Panamericana Norte road.
Concesion Canchaque S.A.C.	Peru	Concession for operating and maintaining of the Buenos Aires – Canchaque provincial road highway.
Concesionaria Via Expresa Sur S.A.	Peru	Concession for designing, constructing, operating and maintaining the Via Expresa - Paseo de la Republica in Lima.
Real estate:
VIVA GyM S.A.	Peru	Developing and managing real estate projects directly or together with other partners.
Parent company operation:
Adexus S.A.	Chile, Peru, Colombia and Ecuador	IT solutions services.
CAM Holding S.p.A.	Chile	Investment company.
Qualys S.A.	Peru	Human, economic and technological services to the Group’s companies.
Promotora Larcomar S.A.	Peru	Building a hotel complex on a plot of land located in the district of Miraflores.
Promotores Asociados de Inmobiliarias S.A.	Peru	Operating in the real-estate industry and engaged in the development and sale of office premises in Peru.
Negocios del Gas S.A.	Peru	Investment company for construction, operation, and maintenance of the pipeline system to transport natural gas and liquids.
Inversiones en Autopistas S.A.	Peru	Holding company of shares, participation or any other credit instrument or investment document.

F-43

The following table shows the Group’s subsidiaries and related interest as of December 31, 2019:

	Percentage of common shares directly held by Parent (%)			Percentage of common shares held by Subsidiaries (%)			Percentage of common shares held by the Group (%)			Percentage of common shares held by non-controlling interests (%)
Engineering and Construction:
GyM S.A.		98.87	%		—			98.87	%		1.13	%
- Morelco S.A.S.		—			70.00	%		70.00	%		30.00	%
- GyM Chile S.p.A.		—			100.00	%		100.00	%		—
- Vial y Vives – DSD S.A.		—			94.49	%		94.49	%		5.51	%
GMI S.A.		89.41	%		—			89.41	%		10.59	%
- Ecología Tecnología Ambiental S.A.C.		—			100.00	%		100.00	%		—
- GM Ingenieria y Construcción de CV		—			99.00	%		99.00	%		1.00	%
- GM Ingenieria Bolivia S.R.L.		—			98.57	%		98.57	%		1.43	%
Infrastructure:
GMP S.A.		95.00	%		—			95.00	%		5.00	%
- Oiltanking Andina Services S.A.		—			50.00	%		50.00	%		50.00	%
- Transportadora de Gas Natural Comprimido Andino S.A.C.		—			99.93	%		99.93	%		0.07	%
Concar S.A.		100.00	%		—			100.00	%		—
GyM Ferrovias S.A.		75.00	%		—			75.00	%		25.00	%
Survial S.A.		100.00	%		—			100.00	%		—
Norvial S.A.		18.20	%		48.80	%		67.00	%		33.00	%
Concesión Canchaque S.A.		99.96	%		0.04	%		100.00	%		—
Concesionaria Vía Expresa Sur S.A.		99.98	%		0.02	%		100.00	%		—
Real Estate:
Viva GyM S.A.		56.22	%		43.32	%		99.54	%		0.46	%
Parent company operations:
Qualys S.A ( Previously Generadora Arabesco S.A.)		100.00	%		—			100.00	%		—
Promotora Larcomar S.A.		46.55	%		—			46.55	%		53.45	%
Negocios del Gas S.A.		99.99	%		0.01	%		100.00	%		—
Agenera S.A.		99.00	%		1.00	%		100.00	%		—
Inversiones en Autopistas S.A.		1.00	%		99.00	%		100.00	%		—
Cam Holding S.p.A.		100.00	%		—			100.00	%		—
Adexus S.A.		100.00	%		—			100.00	%		—

F-44

The following table shows the Group’s subsidiaries and related interest as of December 31, 2018:

	Percentage of common shares directly held by Parent (%)			Percentage of common shares held by Subsidiaries (%)			Percentage of common shares held by the Group (%)			Percentage of common shares held by non-controlling interests (%)
Engineering and Construction:
GyM S.A.		98.24	%		—			98.24	%		1.76	%
- Morelco S.A.S.		—			70.00	%		70.00	%		30.00	%
- GyM Chile S.p.A.		—			94.49	%		99.99	%		0.01	%
- Vial y Vives – DSD S.A.		—			94.49	%		94.49	%		5.51	%
GMI S.A.		89.41	%		—			89.41	%		10.59	%
- Ecología Tecnología Ambiental S.A.C.		—			—			99.99	%		0.01	%
- GM Ingenieria y Construcción de CV		—			—			99.00	%		1.00	%
- GM Ingenieria Bolivia S.R.L.		—			—			99.00	%		1.00	%
Infrastructure:
GMP S.A.		95.00	%		—			95.00	%		5.00	%
- Oiltanking Andina Services S.A.		—			50.00	%		50.00	%		50.00	%
- Transportadora de Gas Natural Comprimido Andino S.A.C.		—			99.93	%		99.93	%		0.07	%
Concar S.A.		99.99	%		—			99.99	%		0.01	%
GyM Ferrovias S.A.		75.00	%		—			75.00	%		25.00	%
Survial S.A.		99.99	%		—			99.99	%		0.01	%
Norvial S.A.		67.00	%		—			67.00	%		33.00	%
Concesión Canchaque S.A.		99.96	%		—			99.96	%		0.04	%
Concesionaria Vía Expresa Sur S.A.		99.98	%		0.02	%		100.00	%		—
Real Estate:
Viva GyM S.A.		63.44	%		36.10	%		99.54	%		0.46	%
Parent company operations:
Qualys S.A (Previously Generadora Arabesco S.A.)		99.00	%		—			99.00	%		1.00	%
Promotora Larcomar S.A.		46.55	%		—			46.55	%		53.45	%
Negocios del Gas S.A.		99.99	%		0.01	%		100.00	%		—
Agenera S.A.		99.00	%		1.00	%		100.00	%		—
Inversiones en Autopistas S.A.		100.00	%		—			—			—
Cam Holding S.p.A.		100.00	%		—			100.00	%		—
Adexus S.A.		99.99	%		0.01	%		100.00	%		—

All investments in subsidiaries have been included in the consolidation. The proportion of voting rights in such subsidiaries is held directly by the Company and does not differ significantly from the proportion of shares held.

In June 2018, the Company expanded its shareholding to 100% of the subsidiary Adexus S.A. (Note 32-a).

In 2018, the subsidiary Cam Servicios del Perú S.A. was sold, as well as the following indirect subsidiaries: i) Stracon GyM S.A. through GyM S.A. and ii) Cam Chile S.p.A., through Cam Holding S.p.A. In that year, these investments were deconsolidated by the Company, and their operations are shown in Note 36.

F-45

As of December 31, the non-controlling interest is attributed to the following subsidiaries:

	2018		2019
Viva GyM S.A. and subsidiaries		168,612		168,839
GyM S.A. and subsidiaries		67,639		61,569
Norvial S.A.		65,918		63,031
GMP S.A.		23,424		24,413
GyM Ferrovias S.A.		55,986		77,564
Promotora Larcomar S.A.		13,121		3,058
Other		6,871		(199	)
		401,571		398,275

In December 2019, the subsidiary Viva GyM S.A. through the General Shareholders’ Meeting, agreed to capitalize its supplementary premium for the amount of S/65.3 million to subsequently reduce the share capital in a non-proportional manner by returning contributions amounting to S/82.3 million. The return did not generate cash outflow as the reciprocal obligations between its shareholders with the subsidiary were offset. Consequently, the Company modified its participation in its subsidiary from 63.4% to 56.2%, in turn its subsidiary GyM S.A. (also a shareholder of Viva GyM S.A.) modified its stake from 36.1% to 43.3%.

In addition, in December 2019 the subsidiary GyM S.A. through the General Shareholders’ Meeting agreed to the capital increase for monetary contributions in the amount of S/146.1 million. Minority shareholders voluntarily waived the pre-emptive subscription right, causing the Company’s participation percentage to increase from 98.2% to 98.9%.

Summarized financial information of subsidiaries with material non-controlling interests

Set out below is the summarized financial information for each subsidiary that has non-controlling interests that are material to the Group.

Summarized statement of financial position

	Viva GyM S.A. and subsidiaries						GyM S.A. and subsidiaries						Norvial S.A.						GyM Ferrovías S.A.
	At December 31,						At December 31,						At December 31,						At December 31,
	2018			2019			2018			2019			2018			2019			2018			2019
Current:
Assets		720,976			591,402			1,262,588			1,232,486			109,778			84,889			534,148			449,180
Liabilities		(310,132	)		(263,592	)		(1,467,953	)		(1,491,747	)		(66,506	)		(53,715	)		(563,081	)		(93,879	)
Current net assets (liabilities)		410,844			327,810			(205,365	)		(259,261	)		43,272			31,174			(28,933	)		355,301
Non-current:
Assets		98,504			121,529			980,653			1,100,218			462,739			442,186			974,688			623,033
Liabilities		(37,154	)		(37,851	)		(413,026	)		(486,924	)		(306,261	)		(282,358	)		(716,946	)		(668,080	)
Non-current net assets (liabilities)		61,350			83,678			567,627			613,294			156,478			159,828			257,742			(45,047	)
Net assets		472,194			411,488			362,262			354,033			199,750			191,002			228,809			310,254

F-46

Summarized income statement    

	Viva GyM S.A. and subsidiaries						GyM S.A. and subsidiaries						Norvial S.A.						GyM Ferrovías S.A.
	For the year ended						For the year ended						For the year ended						For the year ended
	2018			2019			2018			2019			2018			2019			2018			2019
Revenue		630,130			264,401			1,704,998			2,279,786			163,117			272,679			577,993			397,853
Profit (loss) before income tax		226,945			30,729			(154,452	)		(116,081	)		21,104			24,067			116,822			121,079
Income tax		(69,166	)		(7,000	)		18,559			(30,843	)		(3,885	)		(6,815	)		(35,524	)		(39,634	)
Profit (loss) for the year		157,779			23,729			(135,893	)		(146,924	)		17,219			17,252			81,298			81,445
Discontinued operations		—			—			44,096			—			—			—			—			—
Other comprehensive income		—			—			(14,061	)		(7,436	)		—			—			—			—
Total comprehensive income for the year		157,779			23,729			(105,858	)		(154,360	)		17,219			17,252			81,298			81,445
Dividends paid to non-controlling interest (Note 35-d)		84,870			—			4,241			—			8,184			8,580			—			—

Summarized statement of cash flows

	Viva GyM S.A. and subsidiaries						GyM S.A. and subsidiaries						Norvial S.A.						GyM Ferrovías S.A.
	For the year ended						For the year ended						For the year ended						For the year ended
	2018			2019			2018			2019			2018			2019			2018			2019
Net cash provided from operating activities		259,992			28,791			148,754			(25,502	)		70,939			12,514			(161,318	)		379,882
Net cash (applied to) provided from investing activities		(8,460	)		(2,613	)		233,150			(20,173	)		(2	)		(33	)		1,928			2,845
Net cash (applied to) provided from financing activities		(255,979	)		(58,722	)		(388,836	)		209,514			(43,536	)		(46,045	)		189,495			(273,009	)
(Decrease) increase in cash and cash equivalents, net		(4,447	)		(32,544	)		(6,932	)		163,839			27,401			(33,564	)		30,105			109,718
Cash and cash equivalents at the beginning of the year		97,709			93,262			179,560			172,628			72,449			99,850			161,073			191,178
Cash and cash equivalents at the end of the year		93,262			60,718			172,628			336,467			99,850			66,286			191,178			300,896

The information above is the amount before inter-company eliminations.

b) Public services concessions

The Group has public service concessions. When applicable, the income attributable to the construction or restoration of infrastructure has been accounted for by applying the models described in Note 2.5 (financial asset model, intangible asset and forked model).

After the termination of the Contract between TGNCA and the Ministry of Energy and Mines, Management is preparing new gas compression and liquefaction projects. Additionally, it is evaluating the centralization of the gas business through this vehicle, a decision that must be approved by the Board of Directors in 2020.

In all the Group’s concessions, the infrastructure returns to the Grantor at the end of the Contract.

F-47

The concessions held by the Group are as follows as of December 31, 2018 and 2019:

Name of Concession	Description	Estimated investment	Consideration	Ordinary shares held	Concession termination	Accounting model
Survial S.A.	This company operates and maintains a 750 km road from the San Juan de Marcona port to Urcos, Peru, which is connected to an interoceanic road. The road has five toll stations and three weigh stations.	US$99 million	Transaction secured by the Peruvian Government involving from annual payments for the maintenance and operation of the road, which is in charge of the Peruvian Ministry of Transport and Communications (MTC).	99.90%	2032	Financial asset
Canchaque S.A.C.	This company operates and periodically maintains a 78 km road which connects the towns of Buenos Aires and Canchaque, in Peru. The road has one toll station.	US$31 million (US$29 million in 2018)	Transaction secured by the Peruvian Government regardless the traffic volume. Revenue is secured by an annual minimum amount of US$0.3 million.	99.96%	2025	Financial asset
Concesionaria. La Chira S.A.	Designing, financing, constructing, operating and maintaining project called “Planta de Tratamiento de Aguas Residuales y Emisario Submarino La Chira”. The Project will treat approximately 25% of wastewaters in Lima.	S/250 million	Transaction secured by the Peruvian Government consisting of monthly and quarterly payments settled by Sedapal´s collection trust.	50.00%	2036	Financial asset
GyM Ferrovias S.A.	Concession for the operation of Line 1 of Lima Metro, Peru’s only urban railway system in Lima city, which includes (i) operation and maintenance of the existing trains (24 initial investment trains and 20 additional trains), (ii) operation and maintenance of the railway system (railway and infrastructure).	S/642 million	Transaction secured by the Peruvian Government involving a quarterly payment received from MTC based on km travelled per train.	75.00%	2041	Financial asset

F-48

Name of Concession	Description	Estimated investment	Consideration	Ordinary shares held	Concession termination	Accounting model
Norvial S.A.	The Company operates and maintains the highway that connects Lima to the northwest of Peru. This 183 km road known as Red Vial 5 runs from the cities of Ancon to Pativilca and has three toll stations.	US$187 million (US$152 million in 2018)	From users (self-financed concession; revenue is derived from collection of tolls).	67.00%	2028	Intangible
Via Expresa Sur S.A.	The Company obtained the concession for designing, financing, building, operating and maintaining the infrastructure associated with the Via Expresa Sur Project. This project involves the second stage expansion of the Via Expresa - Paseo de la Republica,between Republica de Panama Avenue and and Panamericana highway.	US$197 million	The contract gives the right of collection from users; however the Peruvian Government shall pay the difference when the operating revenue obtained is below US$18 million during the first two years and US$19.7 million from the third year to the fifteenth year of the effective period of the financing, with a ceiling of US$10 million. In June 2017, the contract was suspended temporarily for one year by agreement between the Concessionaire and the grantor. The suspension was extended until June 2020.	99.98%	2053	Bifurcated

F-49

c) Main joint operations

At December 31, 2019, the Group is a partner to 51 Joint Operations with third parties (51 at December 31, 2018 and 64 at December 31, 2017). The table below lists the Group’s major Joint Operations.

	Percentage of interest
Joint operations	2017			2018			2019
Graña y Montero S.A.A.
- Concesionaria La Chira S.A.		50	%		50	%		50	%
GyM S.A.
- Consorcio CDEM		85	%		85	%		85	%
- Consorcio Huacho Pativilca		67	%		67	%		67	%
- Consorcio GyM – CONCIVILES		67	%		67	%		67	%
- Consorcio AMDP norte		50	%		50	%		—
- Consorcio Chicama - Ascope		50	%		50	%		50	%
- Consorcio Constructor Alto Cayma		50	%		50	%		50	%
- Consorcio Energía y Vapor		50	%		50	%		50	%
- Consorcio Ermitaño		50	%		50	%		50	%
- Consorcio GyM Sade Skanska		50	%		50	%		50	%
- Consorcio GYM-OSSA		—			—			50	%
- Consorcio GyM-Stracon		—			50	%		50	%
- Consorcio HV GyM		50	%		50	%		50	%
- Consorcio La Chira		50	%		50	%		50	%
- Consorcio Lima Actividades Comerciales Sur		50	%		50	%		50	%
- Consorcio Lima Actividades Sur		50	%		50	%		50	%
- Consorcio Menegua		50	%		50	%		50	%
- Consorcio para la Atención y Mantenimiento de Ductos		40	%		40	%		—
- Consorcio Rio Mantaro		50	%		50	%		50	%
- Consorcio Río Urubamba		50	%		50	%		50	%
- Consorcio TNT Vial y Vives - DSD Chile LTDA		50	%		50	%		50	%
- Constructora Incolur DSD Limitada		50	%		50	%		50	%
- Consorcio Alto Cayma		49	%		49	%		49	%
- Consorcio La Gloria		49	%		49	%		49	%
- Consorcio Norte Pachacutec		49	%		49	%		49	%
- Consorcio Italo Peruano		48	%		48	%		48	%
- Consorcio Vial Quinua		46	%		46	%		46	%
- Consorcio Constructor Ductos del Sur		29	%		29	%		29	%
- Consorcio Constructor Chavimochic		27	%		27	%		27	%
- Consorcio Vial ICAPAL		10	%		10	%		10	%
GMP S.A.
- Consorcio Terminales		50	%		50	%		50	%
- Terminales del Perú		50	%		50	%		50	%

F-50

	Percentage of interest
Joint operations	2017			2018			2019
CONCAR S.A.
- Consorcio Ancón-Pativilca		67	%		67	%		67	%
- Consorcio Peruano de Conservación		50	%		50	%		50	%
- Consorcio Manperán		67	%		67	%		67	%
- Consorcio Vial Sierra		50	%		100	%		50	%
- Consorcio Vial Ayahuaylas		99	%		99	%		99	%
- Consorcio Vial Sullana		99	%		99	%		99	%
- Consorcio Vial del Sur		99	%		99	%		99	%
Viva GyM S.A.
- Consorcio Panorama		35	%		—			—
GMI S.A.
- Consorcio Vial la Concordia		88	%		88	%		88	%
- Consorcio GMI- Haskoningdhv		—			70	%		70	%
- Consorcio Supervisor Ilo		55	%		55	%		55	%
- Consorcio Poyry-GMI		40	%		40	%		40	%
- Consorcio Internacional Supervisión Valle Sagrado		33	%		33	%		33	%
- Consorcio Ecotec - GMI - PIM		—			30	%		30	%
- Consorcio Ribereño Chinchaycamac		—			—			40	%

All the joint agreements listed above are operated in Peru, Chile and Colombia.

On November 2, 2019, the operation contract of Consorcio Terminales of the subsidiary GMP S.A., corresponding to the terminals of Pisco, Mollendo, Ilo, Cusco and Juliaca, was terminated, and the assets and operations were delivered to Petroperú. Currently, it is in the process of liquidating assets and liabilities.

The main activities of the joint operations correspond to:

Joint Operations in	Economic activity
Graña y Montero S.A.A.	Construction, operation and maintenance of La Chira wastewater treatment plant in the south of Lima. The project is aimed to solve Lima’s environmental problems caused by sewage discharged directly into the sea.
GyM S.A.	These joint operations were created exclusively for the development of construction contracts.
GMP S.A.	Consorcio Terminales and Terminales del Peru provide services for receiving, storing, shipping and transporting liquid hydrocarbons, such as gasoline, jet fuel, diesel fuel and residual among others.
CONCAR S.A.	Concar’s joint operations provides rehabilitation service, routine and periodic maintenance of the road, and road conservation and preservation services.
GMI S.A.	Engineering consulting services in, study and project execution, project management and Works supervision.

F-51

The consolidated financial statements do not include any other type of entities in addition to those mentioned above, such as trust funds or special purpose entities.

7 SEGMENT REPORTING

Operating segments are reported consistently with the internal reports that are reviewed by the Group’s chief decision-maker; that is, the Executive Committee, which is led by the Corporate General Manager. This Committee acts as the maximum authority in operations decision making and is responsible for allocating resources and evaluating the performance of each operating segment.

The Group’s operating segments are assessed by the activities of the following business units: (i) engineering and construction, (ii) infrastructure, (iii) real estate and (iv) parent company operations.

As set forth under IFRS 8, reportable segments based on the level of revenue is: ‘engineering and construction’. However, the Group has voluntarily decided to report on all its operating segments as detailed in this Note.

The revenues derived from foreign operations (Chile y Colombia) comprise 14% of the Group’s total revenue reported in 2019 (20.3% in 2018 and 10.6% in 2017).

Sales between segments are carried out at arm’s length, are not material, and are eliminated on consolidation. The revenue from external parties is measured in a manner consistent with that in the income statement. The sale of goods relates to the real estate segment. Revenue from services relate to all other segments.

Group sales and receivables are not concentrated in a few private customers. There is no external customer that represents 10% or more of the Group’s revenue.

The principal activities of the Group in each operating segments are as follows:

a) Engineering and construction: This segment includes from traditional engineering services such as structural, civil and design engineering, and architectural planning to advanced specialties including process design, simulation, and environmental services at three divisions; i) civil works, such as the construction of hydroelectric power stations and other large infrastructure facilities; (ii) electro-mechanic construction, such as concentrator plants, oil, and natural gas pipelines, and transmission lines; iii) building construction, such as office buildings, residential buildings, hotels, affordable housing projects, shopping centers, and industrial facilities.

b) Infrastructure: The Group has long-term concessions or similar contractual arrangements in Peru for three toll roads, the Lima Metro, a wastewater treatment plant in Lima, four producing oil fields, a gas processing plant and operation and maintenance services for infrastructure assets.

c) Real Estate: The Group develops and sells homes targeted to low and middle-income population sectors which are experiencing a significant increase in disposable income, as well as, office and commercial space to a lesser extent.

d) Parent Company Operation corresponds to services provided to related entities of the Group such as strategic and functional advisory services and operational leasing of offices.

The Executive Committee uses adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) to assess the performance of operating segments. In 2019, additional provisions were considered for some of the Group´s assets, such as impairment of investments, impairment of account receivables, impairment of goodwill, provision for civil repair and legal claims.

F-52

Profit before income tax reconciles to EBITDA as follows:

EBITDA

	2017		2018		2019
Net profit (loss)		209,238		57,415		(838,642	)
Financial income and expenses		137,035		197,057		157,053
Income tax		46,305		113,318		319,957
Depreciation and amortization		179,725		189,509		202,630
EBITDA (*)		572,303		557,299		(159,002	)

(*) Discontinued operations not included

EBITDA for each segment is as follows:

	2017			2018			2019
Engineering and construction		119,987			19,243			2,885
Infrastructure		300,935			411,502			355,296
Real estate		177,286			240,991			76,239
Parent company operations		125,938			(27,803	)		(1,077,259	)
Intercompany eliminations		(151,843	)		(86,634	)		483,837
EBITDA		572,303			557,299			(159,002	)

Backlog refers to the expected future revenue undersigned contracts and legally binding letters of intent. The breakdown by operating segments as of December 31, 2019, and the dates in which they are estimated to be realized is shown in the following table:

	As of December 31, 2019
Engineering and Construction		3,018,822
Infrastructure		1,837,305
Real estate		209,893
Intercompany eliminations		(434,039	)
		4,631,981

F-53

The following table shows the Group’s financial statements by operating segments:

Operating segments financial position

Segment reporting

			Infrastructure
	Engineering and construction		Energy		Toll roads		Transportation		Water treatment		Real estate		Parent Company operations		Eliminations			Consolidated
As of December 31, 2018
Assets.-
Cash and cash equivalent		177,455		34,816		168,460		191,178		6,700		93,262		129,269		—			801,140
Trade accounts receivables, net		583,842		54,350		78,013		226,919		598		63,038		1,068		—			1,007,828
Work in progress, net		24,962		—		—		—		—		—		3,576		—			28,538
Accounts receivable from related parties		203,583		492		40,820		758		9,930		60,759		98,308		(379,747	)		34,903
Other accounts receivable		386,467		37,611		28,492		31,012		199		55,508		49,160		2			588,451
Inventories, net		27,852		18,823		9,206		25,282		—		448,328		—		(15,444	)		514,047
Prepaid expenses		3,825		1,345		3,068		874		135		81		1,221		—			10,549
		1,407,986		147,437		328,059		476,023		17,562		720,976		282,602		(395,189	)		2,985,456
Non-current assets classified as held for sale		—		—		—		—		—		—		247,798		—			247,798
Total current assets		1,407,986		147,437		328,059		476,023		17,562		720,976		530,400		(395,189	)		3,233,254
Long-term trade accounts receivable, net		14,455		—		33,380		966,202		—		6,030		—		—			1,020,067
Long-term work in progress, net		—		—		32,212		—		—		—		—		—			32,212
Long-term accounts receivable from related parties		254,660		—		39,341		—		—		—		744,655		(260,430	)		778,226
Prepaid expenses		—		—		28,214		5,152		840		—		—		(509	)		33,697
Other long-term accounts receivable		77,028		63,797		7,058		64,817		7,346		30,268		52,645		(2	)		302,957
Investments in associates and joint ventures		114,676		7,230		—		—		—		5,604		2,213,023		(2,082,768	)		257,765
Investment property		—		—		—		—		—		29,133		—		—			29,133
Property, plant and equipment, net		205,678		171,430		14,585		1,586		109		9,237		69,088		(1,159	)		470,554
Intangible assets, net		160,088		183,614		466,153		749		—		1,105		23,514		11,872			847,095
Deferred income tax asset		166,624		5,025		11,876		—		620		17,127		218,201		5,963			425,436
Total non-current assets		993,209		431,096		632,819		1,038,506		8,915		98,504		3,321,126		(2,327,033	)		4,197,142
Total assets		2,401,195		578,533		960,878		1,514,529		26,477		819,480		3,851,526		(2,722,222	)		7,430,396
Liabilities.-
Borrowings		232,409		26,621		15,384		209,463		—		133,105		209,492		—			826,474
Bonds		—		—		25,745		13,422		—		—		—		—			39,167
Trade accounts payable		777,130		49,254		61,233		104,652		121		31,173		55,968		—			1,079,531
Accounts payable to related parties		179,351		1,933		46,099		65,256		58		35,085		91,754		(363,595	)		55,941
Current income tax		5,898		2,797		1,398		9,888		226		4,219		1,381		—			25,807
Other accounts payable		389,896		13,147		72,823		11,677		631		106,286		38,209		—			632,669
Provisions		521		5,412		—		—		—		264		—		—			6,197
Non-current liabilities classified as held for sale		—		—		—		—		—		—		225,828		—			225,828
Total current liabilities		1,585,205		99,164		222,682		414,358		1,036		310,132		622,632		(363,595	)		2,891,614
Borrowings		9,314		87,166		556		—		—		10,684		268,478		—			376,198
Long-term bonds		—		—		299,637		598,238		—		—		—		—			897,875
Other long-term accounts payable		357,146		—		31,477		154,756		1,656		26,470		2,605		—			574,110
Long-term accounts payable to related parties		8,880		—		1,167		81,207		23,445		—		183,826		(276,676	)		21,849
Provisions		32,122		20,234		—		—		—		—		51,055		—			103,411
Derivative financial instruments		—		61		—		—		—		—		—		—			61
Deferred income tax liability		5,564		24,541		7,010		37,178		—		—		1,054		—			75,347
Total non-current liabilities		413,026		132,002		339,847		871,379		25,101		37,154		507,018		(276,676	)		2,048,851
Total liabilities		1,998,231		231,166		562,529		1,285,737		26,137		347,286		1,129,650		(640,271	)		4,940,465
Equity attributable to controlling interest in the Company		331,178		323,943		332,406		171,594		340		193,483		2,708,803		(1,973,387	)		2,088,360
Non-controlling interest		71,786		23,424		65,943		57,198		—		278,711		13,073		(108,564	)		401,571
Total liabilities and equity		2,401,195		578,533		960,878		1,514,529		26,477		819,480		3,851,526		(2,722,222	)		7,430,396

F-54

Operating segments financial position

Segment reporting

			Infrastructure
	Engineering and construction		Energy		Toll roads		Transportation		Water treatment		Real estate		Parent Company operations		Eliminations			Consolidated
As of December 31, 2019
Assets.-
Cash and cash equivalent		372,991		53,118		123,020		300,896		6,388		60,718		31,847		—			948,978
Trade accounts receivables, net		531,591		63,402		44,513		97,059		1,168		83,019		985		—			821,737
Work in progress, net		49,457		—		—		—		—		—		—		—			49,457
Accounts receivable from related parties		202,181		369		43,852		1,853		—		1,144		99,794		(312,535	)		36,658
Other accounts receivable		327,977		30,853		30,228		18,548		109		9,509		27,274		2			444,500
Inventories, net		57,093		32,366		7,109		30,594		—		437,012		—		(11,601	)		552,573
Prepaid expenses		6,812		1,271		2,779		231		133		—		122		—			11,348
		1,548,102		181,379		251,501		449,181		7,798		591,402		160,022		(324,134	)		2,865,251
Non-current assets classified as held for sale		2,398		—		—		—		—		—		203,020		—			205,418
Total current assets		1,550,500		181,379		251,501		449,181		7,798		591,402		363,042		(324,134	)		3,070,669
Long-term trade accounts receivable, net		97,256		—		36,273		619,086		—		587		—		—			753,202
Long-term work in progress, net		—		—		23,117		—		—		—		—		—			23,117
Long-term accounts receivable from related parties		290,966		—		836		—		10,475		—		552,687		(308,023	)		546,941
Prepaid expenses		—		887		24,462		2,307		788		—		—		(510	)		27,934
Other long-term accounts receivable		113,879		63,649		5,156		—		7,346		50,449		59,844		—			300,323
Investments in associates and joint ventures		109,839		8,006		—		—		—		6,062		1,495,422		(1,582,294	)		37,035
Investment property		1,450		—		—		—		—		26,876		—		—			28,326
Property, plant and equipment, net		186,589		184,819		11,106		841		153		11,742		49,779		(1,159	)		443,870
Intangible assets, net		136,547		244,901		443,420		794		—		1,029		19,490		7,134			853,315
Right-of-use assets, net		5,638		24,038		3,860		5		7		5,048		55,532		(15,315	)		78,813
Deferred income tax asset		176,740		4,741		13,054		—		720		19,736		20,752		5,176			240,919
Total non-current assets		1,118,904		531,041		561,284		623,033		19,489		121,529		2,253,506		(1,894,991	)		3,333,795
Total assets		2,669,404		712,420		812,785		1,072,214		27,287		712,931		2,616,548		(2,219,125	)		6,404,464
Liabilities.-
Borrowings		180,535		42,760		2,383		5		6		116,231		121,379		(9,039	)		454,260
Bonds		—		—		28,995		15,742		—		—		—		—			44,737
Trade accounts payable		932,142		67,444		34,762		28,508		132		39,645		33,488		—			1,136,121
Accounts payable to related parties		206,907		2,233		35,554		21,024		—		23,437		58,951		(309,190	)		38,916
Current income tax		18,451		961		3,710		23,887		—		704		286		—			47,999
Other accounts payable		441,271		16,721		53,987		4,713		835		83,345		34,433		—			635,305
Provisions		6,031		18,459		6,183		—		—		230		82,580		—			113,483
Non-current liabilities classified as held for sale		—		—		—		—		—		—		210,025		—			210,025
Total current liabilities		1,785,337		148,578		165,574		93,879		973		263,592		541,142		(318,229	)		2,680,846
Borrowings		32,620		116,218		2,070		—		—		11,010		190,671		(7,783	)		344,806
Long-term bonds		—		—		276,550		602,755		—		—		—		—			879,305
Other long-term accounts payable		222,887		—		15,989		2,176		2,106		26,841		3,102		—			273,101
Long-term accounts payable to related parties		120,255		—		836		22,583		23,784		—		165,286		(310,161	)		22,583
Provisions		80,125		40,268		24,691		1,394		—		—		68,474		—			214,952
Derivative financial instruments		—		52		—		—		—		—		—		—			52
Deferred income tax liability		31,037		36,476		5,806		39,172		—		—		243		—			112,734
Total non-current liabilities		486,924		193,014		325,942		668,080		25,890		37,851		427,776		(317,944	)		1,847,533
Total liabilities		2,272,261		341,592		491,516		761,959		26,863		301,443		968,918		(636,173	)		4,528,379
Equity attributable to controlling interest in the Company		330,992		346,415		258,223		232,692		424		137,542		1,644,707		(1,473,185	)		1,477,810
Non-controlling interest		66,151		24,413		63,046		77,563		—		273,946		2,923		(109,767	)		398,275
Total liabilities and equity		2,669,404		712,420		812,785		1,072,214		27,287		712,931		2,616,548		(2,219,125	)		6,404,464

F-55

Operating segment performance

Segment Reporting

				Infrastructure
	Engineering																		Parent
	and												Water			Real			Company
	construction			Energy			Toll roads			Transportation			treatment			estate			operations			Eliminations			Consolidated
For the year ended December 31, 2017 -
Revenue		2,331,907			436,876			642,127			365,771			3,152			647,535			70,050			(483,405	)		4,014,013
Gross profit (loss)		176,473			71,825			139,196			48,696			445			147,383			(37,771	)		(43,795	)		502,452
Administrative expenses		(188,162	)		(15,854	)		(32,453	)		(15,279	)		(317	)		(21,189	)		(100,968	)		51,768			(322,454	)
Other income and expenses, net		(46,445	)		5,138			1,061			5			—			(3,700	)		10,512			560			(32,869	)
Gain from the sale of investments		—			—			—			—			—			49,002			(18,672	)		4,215			34,545
Operating (loss) profit		(58,134	)		61,109			107,804			33,422			128			171,496			(146,899	)		12,748			181,674
Financial expenses		(46,655	)		(13,423	)		(6,892	)		(8,000	)		(50	)		(21,918	)		(81,310	)		27,471			(150,777	)
Financial income		8,491			1,965			3,257			3,606			26			3,569			35,431			(42,603	)		13,742
Share of profit or loss in associates and joint ventures		30,982			1,584			—			—			—			456			142,595			(175,144	)		473
(Loss) profit before income tax		(65,316	)		51,235			104,169			29,028			104			153,603			(50,183	)		(177,528	)		45,112
Income tax		877			(13,151	)		(32,290	)		(9,544	)		(228	)		(35,900	)		44,032			(101	)		(46,305	)
(Loss) profit from continuing operations		(64,439	)		38,084			71,879			19,484			(124	)		117,703			(6,151	)		(177,629	)		(1,193	)
Profit (Loss) from discontinuing operations		76,837			—			—			—			—			—			123,603			9,991			210,431
(Loss) profit for the year		12,398			38,084			71,879			19,484			(124	)		117,703			117,452			(167,638	)		209,238
(Loss) profit from attributable to:
Owners of the Company		12,078			33,714			55,620			14,613			(124	)		48,647			125,182			(140,992	)		148,738
Non-controlling interest		320			4,370			16,259			4,871			—			69,056			(7,730	)		(26,646	)		60,500
		12,398			38,084			71,879			19,484			(124	)		117,703			117,452			(167,638	)		209,238

F-56

Operating segment performance

Segment Reporting

				Infrastructure
	Engineering																		Parent
	and												Water			Real			Company
	construction			Energy			Toll roads			Transportation			treatment			estate			operations			Eliminations			Consolidated
For the year ended December 31, 2018 -
Revenue		1,960,863			560,506			733,148			586,329			3,270			630,130			62,098			(636,882	)		3,899,462
Gross profit (loss)		62,095			120,360			107,092			122,567			592			287,959			(10,564	)		(15,612	)		674,489
Administrative expenses		(136,066	)		(20,898	)		(35,626	)		(12,007	)		(296	)		(50,730	)		(62,890	)		40,080			(278,433	)
Other income and expenses, net		(13,515	)		1,243			(11	)		31			—			(1,971	)		(47,779	)		660			(61,342	)
Operating (loss) profit		(87,486	)		100,705			71,455			110,591			296			235,258			(121,233	)		25,128			334,714
Financial expenses		(82,861	)		(15,631	)		(26,691	)		(20,604	)		6			(11,859	)		(115,077	)		24,735			(247,982	)
Financial income		15,122			4,593			2,560			35,147			554			3,556			31,752			(42,359	)		50,925
Share of profit or loss in associates and joint ventures		11,366			1,608			—			—			—			(10	)		84,138			(100,811	)		(3,709	)
(Loss) profit before income tax		(143,859	)		91,275			47,324			125,134			856			226,945			(112,076	)		(101,651	)		133,948
Income tax		14,361			(26,275	)		(15,737	)		(38,017	)		(517	)		(69,166	)		22,867			(834	)		(113,318	)
(Loss) profit from continuing operations		(129,498	)		65,000			31,587			87,117			339			157,779			(89,209	)		(102,485	)		20,630
Profit (Loss) from discontinuing operations		44,096			—			—			—			—			—			(3,709	)		(3,602	)		36,785
(Loss) profit for the year		(85,402	)		65,000			31,587			87,117			339			157,779			(92,918	)		(106,087	)		57,415
(Loss) profit from attributable to:
Owners of the Company		(86,857	)		59,866			26,731			65,338			339			28,921			(85,715	)		(91,811	)		(83,188	)
Non-controlling interest		1,455			5,134			4,856			21,779			—			128,858			(7,203	)		(14,276	)		140,603
		(85,402	)		65,000			31,587			87,117			339			157,779			(92,918	)		(106,087	)		57,415

F-57

Operating segment performance

Segment Reporting

				Infrastructure
	Engineering																		Parent
	and												Water			Real			Company
	construction			Energy			Toll roads			Transportation			treatment			estate			operations			Eliminations			Consolidated
For the year ended December 31, 2019 -
Revenue		2,797,326			552,584			633,301			397,853			3,555			264,401			87,476			(651,492	)		4,085,004
Gross profit (loss)		98,362			108,291			96,164			119,464			500			70,787			(2,168	)		(49,637	)		441,763
Administrative expenses		(141,421	)		(24,230	)		(28,623	)		(17,991	)		(397	)		(22,045	)		(40,402	)		61,201			(213,908	)
Other income and expenses, net		9,937			606			(47,998	)		(2,661	)		12			20,020			(305,749	)		(921	)		(326,754	)
Gain from sale of investments		—			—			—			—			—			—			—			—			—
Operating (loss) profit		(33,122	)		84,667			19,543			98,812			115			68,762			(348,319	)		10,643			(98,899	)
Financial expenses		(74,171	)		(13,266	)		(27,297	)		(10,948	)		(12	)		(42,320	)		(101,914	)		38,219			(231,709	)
Financial income		5,643			2,033			2,245			33,215			826			3,829			73,832			(46,967	)		74,656
Dividends		—			—			—			—			—			—			12,688			(12,688	)		—
Share of profit or loss in associates and joint ventures		(3,558	)		2,293			—			—			—			458			(711,962	)		493,995			(218,774	)
(Loss) profit before income tax		(105,208	)		75,727			(5,509	)		121,079			929			30,729			(1,075,675	)		483,202			(474,726	)
Income tax		(35,457	)		(22,911	)		(17,112	)		(39,634	)		(506	)		(7,000	)		(196,219	)		(1,118	)		(319,957	)
(Loss) profit from continuing operations		(140,665	)		52,816			(22,621	)		81,445			423			23,729			(1,271,894	)		482,084			(794,683	)
Loss from discontinuing operations		—			—			—			—			—			—			(42,857	)		(1,102	)		(43,959	)
(Loss) profit for the year		(140,665	)		52,816			(22,621	)		81,445			423			23,729			(1,314,751	)		480,982			(838,642	)
(Loss) profit from attributable to:
Owners of the Company		(137,110	)		48,056			(28,270	)		61,084			423			(4,995	)		(1,304,675	)		480,766			(884,721	)
Non-controlling interest		(3,555	)		4,760			5,649			20,361			—			28,724			(10,076	)		216			46,079
		(140,665	)		52,816			(22,621	)		81,445			423			23,729			(1,314,751	)		480,982			(838,642	)

F-58

Segments by geographical area

	2017		2018		2019
Revenues:
- Peru		3,589,048		3,347,540		3,454,959
- Chile		371,986		226,891		388,284
- Colombia		50,829		325,031		241,761
- Bolivia		2,150		—		—
		4,014,013		3,899,462		4,085,004
Non-current assets:
- Peru		4,164,342		3,896,920		3,063,146
- Chile		407,152		142,383		146,891
- Colombia		203,203		157,839		123,758
- Bolivia		149		—		—
- Guyana		878		—		—
		4,775,724		4,197,142		3,333,795

8 FINANCIAL INSTRUMENTS

8.1 Financial instruments by category

The classification of financial assets and liabilities by category is as follows:

	At December, 31
	2018		2019
Financial assets according to the statement of financial position
Loans and accounts receivable at amortized cost:
- Cash and cash equivalents		801,140		948,978
- Trade accounts receivable and other accounts receivable (excluding financial assets)		1,302,358		1,258,476
- Financial assets related to concession agreements		1,227,994		748,365
- Accounts receivable from related parties		813,129		36,658
		4,144,621		2,992,477

F-59

Financial assets related to concession agreements are recorded in the consolidated statement of financial position as the line items short-term trade accounts receivable and long-term trade accounts receivable.

	At December, 31
	2018		2019
Financial liabilities according to the statement of financial position
Other financial liabilities at amortized cost:
- Other financial liabilities		1,169,184		695,870
- Finance leases		33,488		22,980
- Lease liability for right-of-use asset		—		80,216
- Bonds		937,042		924,042
- Trade and other accounts payable (excluding non-financial liabilities)		1,453,933		1,364,131
- Accounts payable to related parties		77,790		61,499
		3,671,437		3,148,738
Hedging derivatives:
- Derivative financial instruments		61		52

8.2 Credit quality of financial assets

The credit quality of financial assets that are neither past due nor impaired can be assessed with reference to external risk ratings (if they exist), or based on historical information on the default rates of their counterparties.

As of December 31, the credit quality of financial assets is presented below:

	At December 31,
	2018		2019
Cash and cash equivalents (*)
Banco de Credito del Peru (A+)		350,403		302,743
Banco Continental (A+)		114,067		186,238
Citibank (A)		134,990		183,719
Banco Scotiabank (A+)		73,039		64,101
Banco de la Nacion (A)		23,766		56,085
Credicorp Capital Colombia (AAA)		—		44,338
Banco Interbank (A)		14,075		41,681
JP Morgan (AAA)		257		17,853
Santander Colombia (AAA)		—		15,183
Banco Scotiabank - Chile (A+)		—		9,801
Banco Bogota (BB+)		16,782		7,255
Banco Santander - Chile (AAA)		3,325		5,817
Banco Santander - Perú (A)		12,221		114
Fondo de Inversion Alianza (AA+)		39,051		46
Banco de crédito e Inversiones - Chile (AA+)		5,909		—
Others		8,312		7,017
		796,197		941,991

The risk ratings in the previous table of “A” and “AAA” represent high quality ratings. For banks in Peru, these risk ratings are obtained from the risk rating agencies authorized by the Superintendence of Banking, Insurance and AFP (SBS). For banks in Chile, ratings are obtained from the risk rating agencies authorized by the Superintendence of Securities and Insurance (SVS) of Chile (Fitch Chile Clasificadora de Riesgo Ltda. and ICR International Credit Rating Cia Clasificadora de Riesgo Ltda.). For banks in Colombia, ratings are obtained from the following financial institutions: Fitch Ratings, Value and Risk Rating S.A., BRC Standard and Poor’s Rating and Technical Committee of BRC Investor Services S.A. SCV.

(*) The difference between the balances shown and the balances of the statement of financial position correspond to cash and remittances in transit (Note 9).

F-60

The credit quality of customers is assessed in three categories (internal classification):

A: New customers/related parties (less than six months),

B: Existing customers/related parties (with more than six months of trade relationship) with no previous default history; and

C: Existing customers/related parties (with more than six months of trade relationship) with previous default history.

	2018		2019
Trade accounts receivable (Note 10)
Counterparties with no external risk rating
A		302,369		58,999
B		1,579,400		1,373,424
C		146,126		142,516
		2,027,895		1,574,939
Receivable from related parties and joint operators (Note 12)
B		813,129		583,599

The total balance of trade accounts receivable and accounts receivable from related parties is subject to the terms and conditions of the respective contract, none of which has been renegotiated.

9 CASH AND CASH EQUIVALENTS

At December 31 this account comprises:

	2018		2019
Cash on hand		1,377		1,323
Remittances in-transit		3,566		5,664
Bank accounts		313,253		223,378
Escrow account (a)		334,579		552,439
Time deposits (b)		148,365		166,174
		801,140		948,978

(a) The Group maintains trust accounts in local and foreign banks that includes reserve funds for bond payments issued by the subsidiaries GyM Ferrovias S.A. and Norvial S.A. for the year 2019 S/181 million and S/18 million, respectively (for the year 2018 S/133 million and S/13 million, respectively), as shown in the following detail:

	2018		2019
Reserve funds issued bonds		146,590		199,192
Real estate projects		38,961		31,794
Engineering and construction projects Colombia		39,084		44,457
Engineering and construction projects Peru		47,538		192,069
Infrastructure projects		62,406		84,927
		334,579		552,439

F-61

(b) Time deposits have maturities less than 90 days and may be renewed upon maturity. These deposits earn interest that fluctuates between 1.15% and 2.85%.

	Financial entities		Interest rate			2018		2019
GyM Ferrovias S.A.		Banco de Credito del Peru		2.70	%		32,000		32,300
GyM Ferrovias S.A.		Banco Continental		1.15	%		—		69,531
GyM S.A.		Banco de Credito del Peru		2.40	%		1,906		28,213
Survial S.A.		Banco de Credito del Peru		2.85	%		—		15,400
GMI S.A.		Banco de Credito del Peru		2.52	%		—		9,993
Graña y Montero S.A.A.		Banco de Credito del Peru		2.40	%		110,281		5,312
Norvial S.A.		Banco de Credito del Peru		2.85	%		—		4,763
Concesion Canchaque S.A.C.		Banco de Credito del Peru		2.85	%		—		662
Concesionaria la Chira S.A.		Banco de Credito del Peru		2.50	%		4,170		—
GMP S.A.		Banco de Credito del Peru		2.50	%		7		—
Viva GyM S.A.		Banco de Credito del Peru		2.50	%		1		—
							148,365		166,174

The above figures are reconciled with the amount of cash shown in the consolidated statement of cash flows at the end of the year as follows:

	2017			2018			2019
Cash and cash equivalent on consolidated statement of financial position		626,180			801,140			948,978
Bank overdrafts (Note 18)		(120	)		(119	)		—
Balances per consolidated statement of cash flows		626,060			801,021			948,978

F-62

10 TRADE ACCOUNTS RECEIVABLES, NET

At December 31, this account comprises:

	Total						Current						Non-current
	2018			2019			2018			2019			2018		2019
Receivables (a)		1,376,517			923,316			827,611			380,135			548,906		543,181
Unbilled receivables - Subsidiaries (b)		79,847			421,841			79,847			336,272			—		85,569
Unbilled receivables - Concessions (c)		584,174			234,688			113,013			110,236			471,161		124,452
		2,040,538			1,579,845			1,020,471			826,643			1,020,067		753,202
Impairment of account receivables		(12,643	)		(4,906	)		(12,643	)		(4,906	)		—		—
		2,027,895			1,574,939			1,007,828			821,737			1,020,067		753,202

a) The non-current portion of commercial receivables is mainly related to the financial asset model (Note 2.5) of the subsidiary GyM Ferrovias S.A. whose fair values of the non-current portion of commercial receivables amount to S/1,013 million (S/1,060 million as of December 31, 2018), these values are based on discounted cash flows using rates of 7.70% (7.33% as of December 31, 2018).

The ageing of the receivables net of impairment are detailed as follows:

	2018		2019
Current		890,100		802,341
Past due up to 30 days		259,062		28,216
Past due from 31 days up to 180 days		28,575		21,490
Past due from 181 days up to 360 days		152,732		28,327
Past due over 360 days		33,405		38,036
		1,363,874		918,410

b) The unbilled receivables by subsidiaries are documents related to the estimates of the degree of progress for services rendered that were not billed, according detail:

	2018		2019
GYM S.A.		14,455		384,660
Concar S.A.		38,770		10,737
GMI S.A.		26,622		24,787
GMP S.A.		—		1,657
		79,847		421,841

F-63

Below are the unbilled receivables by the subsidiaries grouped by the main projects:

	2018		2019
Infrastructure
Operation and maintenance of roads		38,066		9,837
Oil services		—		1,657
Others		703		901
		38,769		12,395
Engineering and Construction
Talara Refinery		—		190,831
North Concentrator Plant - Quellaveco		—		52,488
Oxide Plant - Marcobre		—		26,658
Civil works, assembly and electromechanics - Acero Arequipa		—		16,449
Project Mina Gold Fields La Cima S.A.		11,980		3,409
Generating Plant Machu Picchu		—		13,098
Others		29,098		106,513
		41,078		409,446
		79,847		421,841

c) The unbilled receivables – Concessions, corresponds to future collections for public services granted according to detail below:

	2018		2019
Linea 1 - Metro de Lima		558,179		208,205
Operation and maintenance of roads		25,397		25,315
Others		598		1,168
		584,174		234,688

In 2019, Management recognized in the period an impairment in trade accounts receivable for S/1 million (S/3.10 million in 2018). The maximum exposure to credit risk at the reporting date is the carrying amount of accounts receivable and work in progress (Note 11).

11 WORK IN PROGRESS, NET

At December 31 this account comprises:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Unbilled receivable concessions in progress		32,212		23,117		—		—		32,212		23,117
Work in progress		28,538		49,457		28,538		49,457		—		—
		60,750		72,574		28,538		49,457		32,212		23,117

The ongoing work costs include all expenses incurred by the Group under construction contracts currently in force. The Group estimates that all the cost incurred will be billed and collected.

F-64

Below is the work in progress grouped by the main projects:

	2018		2019
Infrastructure
Road operation and maintenance		32,212		23,117
		32,212		23,117
Engineering and construction
Engineering and Construction Works - GYM Chile S.p.A.		13,007		19,531
Talara Refinery		—		20,126
North Concentrator Plant of Quellaveco		—		1,033
Others		15,531		8,767
		28,538		49,457
		60,750		72,574

12 TRANSACTIONS WITH RELATED PARTIES AND JOINT OPERATORS

a) Transactions with related parties

Major transactions between the Company and its related parties are summarized as follows:

	2017		2018		2019
Revenue from sales of goods and services:
- Joint operations		18,138		56,560		44,130
- Associates		3,367		1,704		108
		21,505		58,264		44,238
Purchase of goods and services:
- Joint operations		14,191		601		1,765
- Associates		2,776		2,130		—
		16,967		2,731		1,765

Transactions between related parties are made based on current price lists and the terms and conditions are the same as those agreed with third parties.

b) Key management compensation

The key management includes directors (executives and non-executives), members of the Executive Committee and Internal Audit Management. Compensation paid or payable to key management in 2019 amounted to S/87.4 million, which includes S/0.4 million of discontinued operations (in 2018, the balance of S/58 million includes S/0.4 million corresponding to discontinued operations, S/90.5 million in 2017, which includes S/25.6 million to discontinued operations) and It only includes short-term benefits.

F-65

c) Balances at the end of the year were:

	At December 31,				At December 31,
	2018				2019
	Receivable		Payable		Receivable		Payable
Current portion:
Joint operations
Consorcio Rio Urubamba		9,122		—		9,042		—
Consorcio Peruano de Conservacion		6,417		—		3,592		—
Consorcio Italo Peruano		3,322		4,996		1,011		363
Consorcio Constructor Chavimochic		2,138		6,199		—		5,953
Consorcio GyM Conciviles		1,855		—		1,257		1,958
Consorcio La Gloria		1,369		1,006		1,750		1,017
Consorcio Ermitaño		781		624		831		440
Consorcio Terminales del Peru S.A.		459		—		1,176		—
Consorcio TNT Vial y Vives - DSD Chile Ltda		—		11,804		—		1,088
Consorcio Rio Mantaro		—		6,655		—		5,869
Consorcio Vial Quinua		—		1,970		—		2,048
Consorcio Huacho Pativilca		—		475		1,419		5,895
Consorcio CDEM		—		—		638		—
Consorcio GyM-Stracon		—		—		2,230		—
Consorcio GyM-OSSA		—		—		7,202		—
Consorcio Chicama Ascope		—		—		2,471		—
Other minors		9,215		11,323		1,407		2,102
		34,678		45,052		34,026		26,733
Other related parties
Ferrovías Argentina		—		10,242		—		12,183
Perú Piping Spools S.A.C.		225		—		2,632		—
Other minors		—		647		—		—
		225		10,889		2,632		12,183
Current portion		34,903		55,941		36,658		38,916
Non-current portion
Gasoducto Sur Peruano S.A.		773,927		—		544,842		—
Ferrovías Participaciones		—		21,849		—		22,583
Other minors		4,299		—		2,099		—
Non-current		778,226		21,849		546,941		22,583

Accounts receivable and payable are mainly of current maturity and have no specific guarantees; except for accounts receivable from GSP and Ferrovías participations. These balances do not generate interest considering their maturity in the short term. The balance of the GyM Conciviles Consortium includes S/31 million registered in 2018. These accounts do not bearn interests due to their short-term nature.

The non-current balance corresponds to the obligations arising from the early termination of the GSP project (Note 15 a-i). As of December 31, 2019, the book value of the non-current account receivable registered by the Company, for S/331 million, was recorded using the discounted cash flow method, at a rate of 3.46% that originated a discount of S/57 million (S/17.8 million in 2018). Additionally, as a result of the early termination of the GSP, and related facts, the subsidiary GyM S.A. it has balances from the Consorcio Constructor Ductos del Sur to those who had previously deteriorated in 2016, it was integrated in the consolidation under the proportional participation method. The value of accounts receivable from CCDS corresponds mainly to collection rights to GSP for S/270 million.

Transactions with non-controlling interests are disclosed in Note 35.

F-66

13 OTHER ACCOUNTS RECEIVABLE

At December 31, this account comprises:

	Total						Current						Non-current
	2018			2019			2018			2019			2018		2019
Advances to suppliers (a)		146,536			135,481			81,719			135,481			64,817		—
Income tax on-account payments (b)		91,353			70,647			91,353			70,647			—		—
VAT credit (c)		105,238			45,910			79,076			31,646			26,162		14,264
Guarantee deposits (d)		180,010			181,400			167,769			98,046			12,241		83,354
Claims to third parties (e)		62,163			79,772			62,163			38,875			—		40,897
Petroleos del Peru S.A.- Petroperu S.A. (f)		75,750			80,941			11,953			17,292			63,797		63,649
ITAN and other tax receivable		45,890			60,883			20,246			30,233			25,644		30,650
Restricted funds (g)		67,972			15,974			39,394			973			28,578		15,001
Rental and sale of equipment - GyM S.A. projects		34,768			30,798			34,768			30,798			—		—
Accounts receivable from personneel		3,479			2,836			3,479			2,836			—		—
Consorcio Constructor Ductos del Sur (h)		52,114			27,782			—			—			52,114		27,782
Consorcio Panorama		27,132			23,491			5,306			—			21,826		23,491
Other minors		23,837			16,488			16,059			15,253			7,778		1,235
		916,242			772,403			613,285			472,080			302,957		300,323
Impairment		(24,834	)		(27,580	)		(24,834	)		(27,580	)		—		—
		891,408			744,823			588,451			444,500			302,957		300,323

The fair value of the other short-term accounts receivable is similar to their book value due to their short-term maturity. The non-current portion corresponds mainly to non-financial assets such as advances to suppliers and tax credits. Other non-current accounts receivable have maturities that vary between 2 and 5 years.

The maximum exposure to credit risk at the reporting date is the carrying amount of each class of other accounts receivable mentioned. The Group does not request guarantees.

Below is a description and composition of the main accounts receivable:

(a) Advance to suppliers - corresponds mainly to the following:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Alsthom Transporte - Linea 1		66,395		2,597		1,578		2,597		64,817		—
Advances - Refineria Talara		9,755		48,303		9,755		48,303		—		—
Advances - joint operations vendors		42,410		49,181		42,410		49,181		—		—
Others		27,976		35,400		27,976		35,400		—		—
		146,536		135,481		81,719		135,481		64,817		—

F-67

(b) Income tax on-account payments, consist of income tax payments and credits in the following subsidiaries:

	Current
	2018		2019
GyM S.A.		55,377		45,628
GMI S.A.		3,877		7,203
GMP S.A.		8,511		2,400
Concar S.A.		8,563		3,709
Viva GyM S.A.		8,114		3,485
Graña y Montero S.A.A.		6,463		2,895
Norvial S.A.		—		4,266
Survial S.A.		334		426
Others		114		635
		91,353		70,647

(c) Tax credit related to VAT on the following subsidiaries:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
GyM S.A.		39,183		12,963		38,653		12,963		530		—
GyM Ferrovias S.A.		25,453		11,970		25,453		11,970		—		—
Graña y Montero S.A.A.		9,821		—		9,821		—		—		—
Concar S.A.		2,382		1,653		2,382		1,653		—		—
Survial SA.		—		1,817		—		1,817		—		—
GMI S.A.		589		1,513		589		1,513		—		—
Viva GyM S.A.		7,255		6,874		511		513		6,744		6,361
Negocios del Gas S.A.		8,411		—		—		—		8,411		—
GMP S.A.		456		396		456		396		—		—
Norvial S.A.		1,997		—		—		—		1,997		—
Concesionaria Vesur S.A.		6,074		—		1,015		—		5,059		—
Others		3,617		8,724		196		821		3,421		7,903
		105,238		45,910		79,076		31,646		26,162		14,264

Management considers that VAT credit will be recovered in the regular course of future operations of subsidiaries.

(d) Guarantee deposits

Corresponds to funds held by customers for construction contracts mainly from the subsidiary GyM S.A. These deposits are retained by customers to ensure the subsidiary’s compliance with its obligations under the contracts. The amounts retained will be recovered once the work is completed.

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Talara Refinery		72,992		55,567		72,992		308		—		55,259
Retention Toquepala		15,633		19,630		15,633		19,630		—		—
Retention Minera Teck		2,848		16,075		2,848		16,075		—		—
Retention Quellaveco		2,996		15,926		2,996		15,926		—		—
Joint operations retention		43,268		29,575		43,268		15,654		—		13,921
Retention Morelco		16,282		15,261		16,282		15,261		—		—
Retention Marcobre		—		5,052		—		5,052		—		—
SBLC guarantees - Sale of CAM Chile S.p.A.		20,221		14,726		7,980		3,576		12,241		11,150
Others		5,770		9,588		5,770		6,564		—		3,024
		180,010		181,400		167,769		98,046		12,241		83,354

F-68

(e) Third-party claims

As of December 31, 2018, it mainly includes the claim of S/27.2 million (net of provision for doubtful accounts of S/19.4 million) for termination of the Purchase and Sale Contract for Real Estate Development Megaproject of Social Housing Construction “Ciudad Alameda de Ancon” signed between the subsidiary Viva GyM S.A., together with the Ministry of Housing, Construction and Sanitation and “Mi Vivienda” fund. Such contract was terminated, and in accordance with the civil code 1372, it is appropriate for the parties to fully reimburse the executed benefits to date, which results in the reimbursement of the S/22 million from the Ministry of Housing and S/5.2 million from the “Mi Vivienda” fund.

As of December 31, 2019, the net amount equals S/20 million, which corresponds to the present value in a term of 11 years and at a rate of 8%. The amount of the lawsuit filed by the subsidiary Viva GyM S.A. against the Ministry of Housing, Construction and Sanitation equals S/116.3 million; which includes compensation for damages (emergent damage and loss of earnings). According to the opinions of Management and legal advisors, it is expected that the amount of the claim will be collected within a maximum period of 11 years.

(f) Other accounts receivable from Petroperu S.A.

It corresponds to accounts receivable to Petroperu S.A., for the additional investments of the Terminales del Perú Consortium of the subsidiary GMP S.A.

(g) Restricted funds

As of December 31, 2019, includes restricted funds of S/7.7 million of the Company related to the sale of GMD S.A. and S/0.9 million of the subsidiary Viva GyM S.A. for bank certificates under guarantee and S/7.3 corresponds to the bank accounts for the reserve account of the Concesionaria La Chira S.A. (S/28 million, S/11 million and S/7.3 million as of December 31, 2018, respectively).

(h) Consorcio Constructor Ductos del Sur

In 2019, it corresponds to a penalty for termination of the contract for S/27.8 million. The decrease compared to the previous year is mainly due to the compensation of debts assumed by the subsidiary GyM S.A. related to CCDS suppliers for S/21.5 million (S/30.6 million in 2018).

14 INVENTORIES

At December 31, this account comprises:

	2018			2019
Land		230,689			183,218
Work in progress - Real estate		135,376			158,010
Finished properties		76,027			86,190
Construction materials		27,852			59,879
Merchandise and supplies		53,310			74,959
		523,254			562,256
Impairment of inventories		(9,207	)		(9,683	)
		514,047			552,573

F-69

Land

Land comprises properties, net of impairment and includes properties for the development of the following projects of the subsidiary GyM Viva S.A. As of December 31, 2019, the land impairment provision equals S/5.2 million (S/9.2 million in 2018):

	2018		2019
Lurin (a)		72,080		71,902
San Isidro (b)		49,664		51,285
San Miguel (c)		28,811		—
Nuevo Chimbote (d)		17,262		17,457
Barranco (e)		13,585		14,202
Huancayo (f)		8,282		—
Piura		8,105		11,805
Carabayllo III		14,941		16,567
Others (g)		8,752		—
		221,482		183,218

(a) Plot of land of 107 hectares that corresponds to Inmobiliaria Almonte S.A.C. and a land 210 hectares that corresponds to Inmobiliaria Almonte 2 S.A.C.; both lands located in the district of Lurin, province of Lima, destined for the purposes of industrial development and public housing.

(b) Land located on David Samanez Ocampo street N° 140 in San Isidro district where a 15-story building with 24 apartments and 124 parking lots will be built.

(c) Regarding the Parques del Mar project located in San Miguel, a traditional multi-family housing condominium with 248 apartments and 185 parking lots is developed. In December 2019, the construction of the condominium began, which is why it is shown in products in process.

(d) Land located in Chimbote of 11.5 hectares for the development of a real estate social housing project.

(e) Land located in Paul Harris St. N°332 and N°336 in Barranco district, for the development of a residential building project.

(f) With respect to the project located in the province of Huancayo, in December 2019, the deliveries of land from the second stage began; That is why the stock of them is shown in finished products.

(g) With respect to others, it includes the Strip project that delivered commercial premises and was transferred from land to finished products for S/22.9 million, as of December 2019 there is a stock in finished products of S/6.3 million.

Land properties correspond to assets maintained since 2015, for which construction has not yet begun. The increase in costs of the year is mainly due to engineering, license paperwork, and other smaller costs. Construction in these land properties is expected to begin in the second half of 2020.

Real estate - work in progress

At December 31, real state work in progress comprises the following projects:

	2018		2019
Los Parques de Comas		69,743		77,757
Los Parques del Callao		46,697		35,549
Los Parques del Mar		—		32,183
Los Parques de Piura		11,066		5,658
Inmobiliaria Pezet 417 S.A.C.		3,563		4,091
Others		4,307		2,772
		135,376		158,010

F-70

During 2019 the Group has capitalized financing costs of these construction projects (Note 2.19) amounting to S/3.7 million at annual interest rates between 7% and 12% (S/7.9 million in 2018 at interest rates between 7% and 12%).

Finished properties

At December 31, the balance of finished properties consists of the following investment properties:

	2018		2019
Los Parques de Comas		18,785		37,605
Huancayo		15,546		19,672
Los Parques de Callao		389		10,914
Klimt		5,911		5,978
El Rancho		19,314		2,347
Los Parques de San Martĺn de Porres		4,029		903
Rivera Navarrete		4,053		131
Los Parques de Carabayllo		942		168
Los Parques de Villa El Salvador II		4,277		117
Others		2,781		3,900
		76,027		81,735

As of December 31, 2019, the balance of finished properties is net of an impairment of S/4.5 million.

Construction materials

As of December 31, 2019, the construction materials correspond mainly to projects of the subsidiary GyM S.A. for S/57.4 million (GyM S.A. for S/27.8 million as of December 31, 2018).

15 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

At December 31, this account comprises:

	2018		2019
Associates		250,282		28,875
Joint ventures		7,483		8,160
		257,765		37,035

The amounts recognized in the income statement as the value of the equity interest are as follows:

	2018			2019
Associates		(5,308	)		(220,993	)
Joint ventures		1,599			2,219
		(3,709	)		(218,774	)

F-71

a) Investment in associates

Set out in the table below are the associates of the Group at December 31, 2018, and 2019 the associates listed below have share capital solely consisting of common shares, which are held directly by the Group. None of the associates are listed companies; therefore, there is no quoted market price available for their shares.

							Carrying amount
	Class		Interest in capital				At December 31,
Entity	of share		2018		2019		2018		2019
			%		%
Gasoducto Sur Peruano S.A. (*)		Common		21.49		21.49		218,276		—
Concesionaria Chavimochic S.A.C.		Common		26.50		26.50		20,524		18,320
Peru Piping Spools S.A.C.		Common		33.33		33.33		5,102		4,166
Obratres S.A.C.		Common		37.50		37.50		3,758		3,756
Inversiones Majes S.A.		Common		9.59		9.59		1,846		2,306
Others								776		327
								250,282		28,875

(*) Mainly corresponds to an write-off of the investment in Gasoducto Sur Peruano S.A. as a whole.

The movement of the investments in associates is as follows:

	2017			2018			2019
Opening balance		286,403			250,053			250,282
Contributions received		2,116			5,616			—
Dividends received		(259	)		—			—
Equity interest in results		(5,566	)		(5,308	)		(220,993	)
Decrease in capital		(111	)		(30	)		—
Disposal of investments		(32,223	)		—			—
Impairment of investment		—			—			(374	)
Conversion adjustment		42			(49	)		(40	)
Discontinued Operations		(349	)
Final balance		250,053			250,282			28,875

The most significant associates are described as follows:

i) Gasoducto Sur Peruano S.A.

In November 2015, the group acquired a 20% interest in Gasoducto Sur Peruano S.A. (hereinafter “GSP”) and obtained a 29% interest in Consorcio Constructor Ductos del Sur (hereinafter “CCDS”) through its subsidiary GyM S.A. GSP signed on July 22, 2014, a concession contract with the Peruvian Government to build, operate and maintain the pipelines transportation system of natural gas to meet the demand of cities in the south of Peru (hereinafter, the “Concession Contract”). Additionally, GSP signed an engineering, procurement, and construction contract with CCDS. The Group made an investment of US$242.5 million (S/819 million) and was required to assume 20% of the performance guarantee established in the concession contract for US$262.5 million (equivalent to S/887 million) and 21.49% of the guarantee for a bridge loan obtained by GSP of US$600 million (equivalent to S/2,027 million).

Early termination of the Concession Agreement

On January 24, 2017 the Ministry of Energy and Mines (hereinafter “MEM”) notified the early termination of the Concession Contract under its clause 6.7 based on GSP’s failure to provide evidence of the project’s financial closing within the contractual deadline and proceeded to the immediate enforcement of the performance guarantee. This situation generated the enforcement of the guarantees provided by the Company for US$52.5 million (S/176.4 million nominal value) and US$129 million (S/433.3 million nominal value) to secure GSP’s obligation with its lenders under a bridge loan granted to it. Under the Concession Agreement, the guarantees were paid by the Company on behalf of GSP, therefore the Company recognized a right to collect from GSP an amount equal to US$181.5 million (S/613.3 million nominal value) that was recorded in 2016 as accounts receivable from related parties.

F-72

On October 11, 2017, GSP and MEM entered into an agreement to deliver the concession assets pursuant to the Concession Agreement. These assets included all the works, equipment, facilities and engineering studies needed for the development of the project.

After the termination of the Concession Contract, the Peruvian Government should have appointed a recognized international audit firm to calculate the net book value of the concession assets (hereinafter “VCN”) and conducted up to three public auctions of the GSP concession pursuant to clause 20 of the Concession Agreement. However, as of the date hereof, the Peruvian Government continues to be in breach of such contractual obligation. An independent audit firm engaged by GSP calculated the VCN to equal US$2,602 million as of December 31, 2016.

On December 4, 2017, GSP entered into a bankruptcy proceeding before the National Institute for the Defense of Competition and Intellectual Protection of Peru. The Group registered a claim for accounts receivable for US$0.4 million (S/1.4 million) and additional accounts receivable of US$169.3 million (S/572.1 million) that is held in trust in benefit of the Company’s creditors. The process is in the debt recognition stage to determine the parties who will be entitled to participate in the Creditors’ Assembly to be convoked under the mentioned bankruptcy proceeding.

The fair value of the investment in GSP, as Group associate, is based on the amount of the VCN, taking into consideration the payments anticipated in the insolvency proceedings, the subordination contracts and the loan assignment agreements entered into by the Company and its partners in the project. Based on management’s estimate of such payments, an impairment of the investment value for US$220 million (S/739 million), corresponding to the year end 2019 US$65 million (S/218 million). In addition, Management has applied, in the consolidated financial statements of the company, an impairment of US$81.5 million (S/276 million) to the long-term account receivable from GSP, and also discount under the amortized cost for US$17 million (S/58 million). In addition, write-off of US$54 million (S/180 million) was made over the deferred tax asset. These effects amounted to US$163.5 million (S/552 million) before taxes recorded in the income statement for the year ended December 31, 2019 and US$54 million (S/180 million) related to income tax expense.

In the opinion of our internal and external legal advisors, any proceeds received by GSP from the Peruvian Government derived from the former’s obligation to reimburse the VCN of the concession assets would not be subject to retention under Law 30737 since this payment does not include a net profit margin, nor does it correspond to the sale of assets.

On December 21, 2018, the Company. submitted to the Peruvian Government a request for direct negotiations demanding the payment of the VCN in favor of GSP therefore, commencing the cool off period under the Concession Contract. This request is based on the right that creditors have under article 1219 of the Peruvian Civil Code to initiate actions against its debtor’s debtors that the former to collect a credit that would allow the payment of the outstanding debt.

Upon the conclusion of the contractual cool off period, the Company filed on October 18, 2019 a request for arbitration before CIADI. The Company withdrew its request for arbitration on December 27 of the same year the preliminary plea bargain agreement entered on the same date by the Company with the Prosecutor and the Ad hoc State Counsel (Note 1).

Such withdrawal does not imply the loss of the Company’s right of collection against GSP nor does it restrict, limit or obstruct the possibility that GSP has of exercising its rights against the Government in the future.

ii) Concesionaria Chavimochic S.A.C.

Concesionaria Chavimochic S.A.C. was awarded the concession to develop and operate the Chavimochic irrigation project for 25 years to: a) design and construction the third-phase of the Chavimochic irrigation project in the province of La Libertad; b) operation and maintenance of works; and c) water supply to the project users. Construction activities started in 2015 and the total investment amounts US$647 million.

F-73

The civil works of the third stage of the Chavimochic Irrigation Project were structured in two phases. To date, the works of the first phase (Palo Redondo Dam) are 70% completed. However, at the beginning of 2017, the procedure for early termination of the Concession Contract was initiated due to the breach of contract by the government, and all activities were suspended in December 2017. Not having reached an agreement, the arbitration process was initiated subject to UNCITRAL rules, and the Arbitral Tribunal was installed. The Company and its legal advisors believe that the ruling will be favorable and the corresponding investment will be recovered.

The following table shows the financial information of the principal associates:

Summarized financial information for associates

Gaseoducto Sur Peruano S.A. do not have activity in 2018 and 2019.

	Gasoducto Sur Peruano S.A.			Concesionaria Chavimochic S.A.C.
	At December, 31			At December, 31
Entity	2018			2018			2019
	(Liquidation base)
Current
Assets		7,006,473			66,052			55,586
Liabilities		(5,294,214	)		(2,183	)		(1,521	)
Non-current
Assets		—			13,580			16,007
Liabilities		—			—			—
Net assets		1,712,259			77,449			70,072

	Concesionaria Chavimochic S.A.C.
Entity	2018			2019
Administrative expenses		(8,455	)		(11,916	)
Loss of the year before tax		(8,455	)		(11,916	)
Income tax		2,543			3,600
Loss of the year		(5,912	)		(8,316	)
Total comprehensive loss		(5,912	)		(8,316	)

F-74

b) Investment in Joint Ventures

Set out below are the joint ventures of the Group as of December 31:

							Carrying amount
	Class		Interest in capital				At December 31,
Entity	of share		2018		2019		2018		2019
			%		%
Logistica Quimicos del Sur S.A.C.		Common		50.00		50.00		7,230		8,006
Constructora SK-VyV Ltda.		Common		50.00		50.00		34		29
Others				—		—		219		125
								7,483		8,160

Logistica Quimicos del Sur S.A.C. operates the Matarani chemical terminal.

The movement of the investments in joint ventures was as follows:

	2017			2018			2019
Opening balance		103,356			18,618			7,483
Equity interest in results		6,039			1,599			2,219
Disposal of Investment		(88,556	)		(10,112	)		—
Dividends received		(3,758	)		(1,823	)		(1,517	)
Conversion adjustment		334			79			(14	)
Impairment of investment		—			(878	)		(11	)
Discontinued Operations		1,203			—			—
Final balance		18,618			7,483			8,160

The following significant movements were carried out:

• The Group received dividends in 2019 from Logística Quimicos del Sur S.A. for S/1.5 million (S/1.8 million in 2018 and S/2.8 million in 2017).

• On April 24, 2017, the Company signed a purchase-sale agreement for their total capital stock (representing 51%) held in their joint venture with Compañia Operadora de Gas del Amazonas S.A.C. (COGA). The selling price was agreed at US$21.5 million (equivalent to S/69.8 million), which was fully paid.

The following table shows the financial information of the principal joint ventures:

Summarized financial information for joint ventures

	At December, 31
Logistica Quimicos del Sur S.A.C.	2018			2019
Current
Cash and cash equivalents		1,520			2,131
Other current assets		1,549			2,416
Total current assets		3,069			4,547
Other current liabilities		(3,513	)		(4,381	)
Total current liabilities		(3,513	)		(4,381	)
Non-current
Total non-current assets		37,349			37,620
Total non-current liabilities		(22,445	)		(21,773	)
Net assets		14,460			16,013
Revenue		11,399			12,622
Depreciation and amortization		(2,313	)		(2,505	)
Interest expense		(668	)		(644	)
Profit from continuing operations		4,698			6,500
Income tax expense		(1,482	)		(1,913	)
Profit from continuing operations after income tax		3,216			4,587
Other comprehensive income		—			—
Total comprehensive income		3,216			4,587

F-75

16 PROPERTY, PLANT AND EQUIPMENT, NET AND RIGHT-OF-USE ASSETS

16.1. PROPERTY, PLANT AND EQUIPMENT

The movement in property, plant and equipment accounts and its related accumulated depreciation for the year ended December 31, 2017, 2018 and 2019 is as follows:

	Land			Buildings			Machinery			Vehicles			Furniture and fixtures			Other equipment			Replacement and in-transit units			Work in progress			Total
At January 1, 2017
Cost		32,614			241,352			1,090,460			443,641			59,593			246,102			21,701			18,853			2,154,316
Accumulated depreciation and impairment		—			(46,256	)		(556,907	)		(239,822	)		(39,422	)		(158,301	)		(9	)		—			(1,040,717	)
Net carrying amount		32,614			195,096			533,553			203,819			20,171			87,801			21,692			18,853			1,113,599
Net initial carrying amount		32,614			195,096			533,553			203,819			20,171			87,801			21,692			18,853			1,113,599
Additions		157			2,724			48,207			36,594			11,607			36,179			23,802			13,178			172,448
Deconsolidation, net		(3,713	)		(26,109	)		—			(1,527	)		(2,153	)		(46,032	)		(3,903	)		(4	)		(83,441	)
Reclassifications, net		—			1,969			12,459			2,888			609			6,579			(17,524	)		(6,980	)		—
Transfers to intangibles (Note 17)		—			—			2,119			724			—			—			(964	)		(2,048	)		(169	)
Deduction for sale of assets		(5,616	)		(51,736	)		(149,202	)		(92,079	)		(4,200	)		(5,270	)		—			—			(308,103	)
Disposals, net		—			(245	)		(4,032	)		(7,507	)		(422	)		(9,413	)		(230	)		(3,606	)		(25,455	)
Depreciation charge		—			(12,469	)		(100,976	)		(45,457	)		(11,654	)		(26,928	)		—			—			(197,484	)
Impairment loss		—			—			(14,328	)		—			—			—			—			(352	)		(14,680	)
Depreciation for sale deductions		—			3,579			115,864			84,145			1,049			3,128			—			—			207,765
Translations adjustments		236			152			606			(350	)		(23	)		980			—			(346	)		1,255
Net final carrying amount		23,678			112,961			444,270			181,250			14,984			47,024			22,873			18,695			865,735
At December 31, 2017
Cost		23,678			157,949			998,207			380,724			62,435			180,409			22,882			19,047			1,845,331
Accumulated depreciation and impairment		—			(44,988	)		(553,937	)		(199,474	)		(47,451	)		(133,385	)		(9	)		(352	)		(979,596	)
Net carrying amount		23,678			112,961			444,270			181,250			14,984			47,024			22,873			18,695			865,735

F-76

	Land			Buildings			Machinery			Vehicles			Furniture and fixtures			Other equipment			Replacement and in-transit units			Work in progress			Total
At January 1, 2018
Cost		23,678			157,949			998,207			380,724			62,435			180,409			22,882			19,047			1,845,331
Accumulated depreciation and impairment		—			(44,988	)		(553,937	)		(199,474	)		(47,451	)		(133,385	)		(9	)		(352	)		(979,596	)
Net carrying amount		23,678			112,961			444,270			181,250			14,984			47,024			22,873			18,695			865,735
Net initial carrying amount		23,678			112,961			444,270			181,250			14,984			47,024			22,873			18,695			865,735
Additions		—			13,216			11,318			9,377			2,145			14,122			5,577			27,431			83,186
Desconsolidation, net		(3,183	)		(33,989	)		(108,993	)		(110,859	)		(1,539	)		(32,878	)		—			(715	)		(292,156	)
Reclassifications		—			17,129			16,626			(1,415	)		(1,430	)		75			(10,577	)		(20,408	)		—
Deduction for sale of assets		—			(3,527	)		(55,567	)		(32,399	)		(2,164	)		(2,200	)		(124	)		—			(95,981	)
Disposals, net		—			(9,723	)		(2,607	)		(1,418	)		(292	)		(461	)		—			(118	)		(14,619	)
Depreciation charge		—			(14,257	)		(67,430	)		(19,391	)		(3,954	)		(18,068	)		—			—			(123,100	)
Impairment loss		—			—			(5,664	)		—			—			—			—			—			(5,664	)
Depreciation for sale deductions		—			1,189			37,452			14,868			1,813			1,702			—			—			57,024
Translations adjustments		(286	)		3,383			(3,310	)		(788	)		(134	)		(2,415	)		—			(321	)		(3,871	)
Net final carrying amount		20,209			86,382			266,095			39,225			9,429			6,901			17,749			24,564			470,554
At December 31, 2018
Cost		20,209			112,548			694,284			83,345			57,222			106,068			17,758			24,916			1,116,350
Accumulated depreciation and impairment		—			(26,166	)		(428,189	)		(44,120	)		(47,793	)		(99,167	)		(9	)		(352	)		(645,796	)
Net carrying amount		20,209			86,382			266,095			39,225			9,429			6,901			17,749			24,564			470,554

F-77

	Land			Buildings			Machinery			Vehicles			Furniture and fixtures			Other equipment			Replacement and in-transit units			Work in progress			Total
At January 1, 2019
Cost		20,209			112,548			694,284			83,345			57,222			106,068			17,758			24,916			1,116,350
Accumulated depreciation and impairment		—			(26,166	)		(428,189	)		(44,120	)		(47,793	)		(99,167	)		(9	)		(352	)		(645,796	)
Net carrying amount		20,209			86,382			266,095			39,225			9,429			6,901			17,749			24,564			470,554
Net initial carrying amount		20,209			86,382			266,095			39,225			9,429			6,901			17,749			24,564			470,554
Additions		290			396			23,011			861			687			8,693			7,036			39,584			80,558
Transfer to investment property (i)		(273	)		(1,187	)		—			—			—			—			—			—			(1,460	)
Reclassifications		—			1,544			40,840			1,033			118			2,054			(14,163	)		(31,426	)		—
Deduction for sale of assets		—			(78	)		(22,885	)		(9,531	)		(133	)		(2,789	)		(9	)		—			(35,425	)
Disposals, net		—			—			(316	)		(101	)		(187	)		(229	)		—			(804	)		(1,637	)
Depreciation charge		—			(5,992	)		(48,035	)		(9,782	)		(2,092	)		(6,137	)		—			—			(72,038	)
Impairment loss		—			—			(4,232	)		—			—			—			—			(15,786	)		(20,018	)
Depreciation for sale deductions		—			78			20,597			5,232			86			2,717			—			—			28,710
Translations adjustments		(525	)		(360	)		(3,719	)		(726	)		(13	)		(31	)		—			—			(5,374	)
Net final carrying amount		19,701			80,783			271,356			26,211			7,895			11,179			10,613			16,132			443,870
At December 31, 2019
Cost		19,974			113,339			726,173			74,434			55,710			111,696			10,624			32,270			1,144,220
Accumulated depreciation and impairment		(273	)		(32,556	)		(454,817	)		(48,223	)		(47,815	)		(100,517	)		(11	)		(16,138	)		(700,350	)
Net carrying amount		19,701			80,783			271,356			26,211			7,895			11,179			10,613			16,132			443,870

F-78

(i) During 2019, a property owned by Morelco S.A.S. (subsidiary of GyM S.A) was transferred to investment properties to the leased to a third party.

In 2017, 2018 and 2019, additions to cost correspond to acquisitions of fixed assets made under financial leases or direct purchases.

The balance of work in progress as of December 31, 2019, is related to investments made by the subsidiary GMP S.A. for S/15.2 million (S/17.3 million as of December 31, 2018 and S/11.0 million as of December 31, 2017) for drilling activities to increase the exploitation of oil and gas. In 2018, the balance included the construction works of the Larcomar Hotel Project for S/15.8 million (S/15.6 million in 2017).

In 2019 the sale of fixed assets amounted to S/12.7 million (S/31.9 million in 2018 and S/127.2 million in 2017), generating a gain of S/6.1 million (loss of S/7.1 million in 2018 and gain of S/26.9 million in 2017), which is shown in the statement of income under the caption “other income and expenses, net” (Note 28). The difference of income from the sale of fixed assets and the gain generated are presented under the caption “income from construction activities” and in “gross profit”, respectively.

Depreciation of property, plant and equipment and investment property is distributed in the income statement as follows:

	2017			2018			2019
Cost of services and goods (Note 26)		103,566			81,199			95,445
Administrative expenses (Note 26)		5,776			5,135			1,907
(+) Depreciation discontinued operations		90,452			39,085			—
Total depreciation related to property, plant and equipment and investment property		199,794			125,419			97,352
(-) Depreciation related to investment property		(2,310	)		(2,319	)		(2,356	)
(-) Depreciation related to right-of-use assets		—			—			(22,958	)
Total depreciation of property, plant and equipment		197,484			123,100			72,038

At 31 December 2019, the Group had fully depreciated assets in use of S/319.2 million (S/424.5 million in 2018 and S/154 million in 2017).

The net carrying amount of machinery and equipment, vehicles and furniture and fixtures acquired under finance lease contracts are broken down as follows:

	At December 31,
	2017			2018			2019
Cost of acquisition		650,301			86,881			67,310
Accumulated depreciation		(351,447	)		(38,026	)		(44,671	)
Net carrying amount		298,854			48,855			22,639

Other financial liabilities are secured by property, plant and equipment for S/111.9 million (S/162.9 million in 2018 and S/368.1 million in 2017).

F-79

16.2. RIGHT-OF-USE ASSETS

As of December 31, 2019, the Group recognized assets and liabilities for right-of-use, as shown in the following table:

	Buildings			Machinery and equipments			Vehicles			Total
At January 1, 2019
Additions		63,479			18,597			19,669			101,745
Depreciation charge		(7,541	)		(6,899	)		(8,518	)		(22,958	)
Translations adjustments		26			—			—			26
Net final carrying amount		55,964			11,698			11,151			78,813
At December 31, 2019
Cost		63,505			18,597			19,669			101,771
Accumulated depreciation		(7,541	)		(6,899	)		(8,518	)		(22,958	)
Net carrying amount		55,964			11,698			11,151			78,813

The expense for depreciation of right-of-use assets for the year ended December 31, 2019 has been distributed in the following items of the consolidated statement of income:

	2019
Cost of services and goods		20,011
Administrative expenses		2,947
		22,958

The costs related to the leasing of machinery and equipment for which the Group applied the exceptions described in paragraph 5 of IFRS 16 are the following:

Leases under 12 months: S/167.3 million.

Leases of low value assets: S/7 million.

Likewise, leases whose payments are entirely variable, which depend on their future performance or use, were excluded, during the year 2019 the expenditure was: S/0.6 million.

F-80

17 INTANGIBLE ASSETS

The movement in intangible assets and the related accumulated amortization as of December 31, 2017, 2018 and 2019 is as follows:

	Goodwill			Trade- marks			Concession rights			Contractual relations with clients			Software and development costs			Costs of development of wells			Land use rights		Other assets			Total
At January 1, 2017
Cost		205,195			109,511			844,213			95,127			60,607			342,100			13,288		37,917			1,707,958
Accumulated amortization and impairment		(60,675	)		(15,845	)		(326,453	)		(62,316	)		(40,586	)		(233,378	)		—		(8,419	)		(747,672	)
Net cost		144,520			93,666			517,760			32,811			20,021			108,722			13,288		29,498			960,286
Net initial cost		144,520			93,666			517,760			32,811			20,021			108,722			13,288		29,498			960,286
Additions		—			—			38,156			5,274			3,330			49,698			—		20,832			117,290
Capitalization of interest		—			—			26,015			—			—			—			—		—			26,015
Deconsolidation, net		(3,524	)		—			(17,354	)		—			(21	)		—			—		(2,767	)		(23,666	)
Transfers from assets under construction		—			—			(11,217	)		—			2,761			5,008			—		3,617			169
Derecognition - net		—			—			(537	)		—			(1,572	)		—			—		(355	)		(2,464	)
Amortization		—			—			(24,609	)		(4,189	)		(8,091	)		(46,695	)		—		(2,973	)		(86,557	)
Impairment loss		(20,068	)		(29,541	)		—			—			—			—			—		—			(49,609	)
Translations adjustments		(4,124	)		975			13			369			1,196			—			—		177			(1,394	)
Net final cost		116,804			65,100			528,227			34,265			17,624			116,733			13,288		48,029			940,070
At December 31, 2017
Cost		197,547			110,486			841,229			98,607			59,913			396,806			13,288		59,324			1,777,200
Accumulated amortization and impairment		(80,743	)		(45,386	)		(313,002	)		(64,342	)		(42,289	)		(280,073	)		—		(11,295	)		(837,130	)
Net cost		116,804			65,100			528,227			34,265			17,624			116,733			13,288		48,029			940,070

F-81

	Goodwill			Trade- marks			Concession rights			Contractual relations with clients			Software and development costs			Costs of development of wells			Land use rights		Other assets			Total
At January 1, 2018
Cost		197,547			110,486			841,229			98,607			59,913			396,806			13,288		59,324			1,777,200
Accumulated amortization and impairment		(80,743	)		(45,386	)		(313,002	)		(64,342	)		(42,289	)		(280,073	)		—		(11,295	)		(837,130	)
Net cost		116,804			65,100			528,227			34,265			17,624			116,733			13,288		48,029			940,070
Net initial cost		116,804			65,100			528,227			34,265			17,624			116,733			13,288		48,029			940,070
Additions		—			—			23,803			—			3,267			68,544			—		5,067			100,681
Capitalization of interest		—			—			3,361			—			—			—			—		—			3,361
Desconsolidation, net		(20,086	)		(8,358	)		(22,758	)		(8,909	)		(10,153	)		—			—		(1,863	)		(72,127	)
Transfers from assets under construction		—			—			—			—			199			—			—		(199	)		—
Derecognition - cost		—			—			(16	)		—			(1,941	)		(4,126	)		—		—			(6,083	)
Amortization		—			—			(50,776	)		(7,996	)		(5,834	)		(41,930	)		—		(5,536	)		(112,072	)
Translations adjustments		(3,430	)		(4,301	)		199			(303	)		830			—			—		270			(6,735	)
Net final cost		93,288			52,441			482,040			17,057			3,992			139,221			13,288		45,768			847,095
At December 31, 2018
Cost		174,031			97,097			836,254			85,482			16,177			461,224			13,288		58,267			1,741,820
Accumulated amortization and impairment		(80,743	)		(44,656	)		(354,214	)		(68,425	)		(12,185	)		(322,003	)		—		(12,499	)		(894,725	)
Net cost		93,288			52,441			482,040			17,057			3,992			139,221			13,288		45,768			847,095

F-82

	Goodwill			Trade- marks			Concession rights			Contractual relations with clients			Software and development costs			Costs of development of wells			Land use rights			Other assets			Total
At January 1, 2019
Cost		174,031			97,097			836,254			85,482			16,177			461,224			13,288			58,267			1,741,820
Accumulated amortization and impairment		(80,743	)		(44,656	)		(354,214	)		(68,425	)		(12,185	)		(322,003	)		—			(12,499	)		(894,725	)
Net cost		93,288			52,441			482,040			17,057			3,992			139,221			13,288			45,768			847,095
Net initial cost		93,288			52,441			482,040			17,057			3,992			139,221			13,288			45,768			847,095
Additions		—			—			26,645			—			3,745			102,022			—			5,212			137,624
Capitalization of interest expenses		—			—			2,725			—			—			—			—			802			3,527
Transfers from assets under construction		—			—			—			—			672			—			—			(672	)		—
Derecognition - net		(930	)		—			—			—			(2,015	)		—			—			(4,106	)		(7,051	)
Amortization		—			—			(49,049	)		(3,682	)		(5,308	)		(43,552	)		—			(3,687	)		(105,278	)
Impairment loss		(33,089	)		—			(3,213	)		—			—			—			(2,468	)		—			(38,770	)
Impairment reversal		—			20,676			—			—			—			—			—			—			20,676
Translations adjustments		(1,902	)		(2,471	)		—			(114	)		(21	)		—			—			—			(4,508	)
Reclassifications		—			49			(15,198	)		(12,760	)		19,410			(3,717	)		—			12,216			—
Net final cost		57,367			70,695			443,950			501			20,475			193,974			10,820			55,533			853,315
At December 31, 2019
Cost		93,887			73,836			710,290			72,810			48,073			558,530			13,288			113,057			1,683,771
Accumulated amortization and impairment		(36,520	)		(3,141	)		(266,340	)		(72,309	)		(27,598	)		(364,556	)		(2,468	)		(57,524	)		(830,456	)
Net cost		57,367			70,695			443,950			501			20,475			193,974			10,820			55,533			853,315

F-83

a) Goodwill

Management reviews the results of its businesses on the basis of the type of economic activity carried on. At December 31, the goodwill of the cash-generating units (CGUs) is distributed as follows:

	2017		2018		2019
Engineering and construction		75,051		71,621		36,632
Electromechanical		20,737		20,737		20,735
Mining and construction services		13,366		—		—
IT equipment and services		930		930		—
Telecommunications services		6,720		—		—
		116,804		93,288		57,367

As a result of management’s annual impairment tests on goodwill, the recoverable amount of cash-generating units was determined on the basis of the greater their value in use and fair value less disposal costs. The value in use was determined on the basis of expected future cash flows generated by the evaluation of CGUs.

As a result of these evaluations in 2019, an impairment was identified in Morelco S.A.S. for S/33 million and Adexus S.A. for S/0.9 million. Through the subsidiary GyM S.A., the loss due to deterioration in Morelco was generated by the decrease in expected flows as a result of the reduction in the contracting of new projects during the year. Additionally, the Company impaired the value of goodwill in Adexus, because the subsidiary submitted a request for bankruptcy reorganization before the courts of justice of Chile, under the law 20720 of that country (Note 36 B).

In 2018, no provision for impairment was recorded. Additionally, it was not necessary to evaluate the impairment of goodwill in Stracon GyM S.A. because in March 2018 the Company sold its interest (87.59%) for a total of US$76.8 million (equivalent to S/248.8 million), generating a profit of S/41.9 million. In 2017, an impairment was identified in two CGU’s, Vial y Vives-DSD, and Morelco SAS and was accounted for as of December 31st, 2017. The impairment loss was generated due to the decrease in the expected cash flows, as a result of the reduction of the contracts linked to the backlog. The impairment impacted the goodwill for S/20.1 million in 2017.

F-84

The main assumptions used by the Group to determine fair value less disposal costs and value in use are as follows:

	Engineering and construction			Electro- mechanical
	%			%
2017
Gross margin		9.50	%		8.00	%
Terminal growth rate		3.00	%		2.00	%
Discount rate		11.18	%		11.48	%
2018
Gross margin		12.67	%		7.63	%
Terminal growth rate		3.00	%		2.00	%
Discount rate		12.55	%		11.44	%
2019
Gross margin		12.43	%		8.86	%
Terminal growth rate		3.00	%		2.00	%
Discount rate		11.83	%		11.40	%

These assumptions have been used for the analysis of each CGUs for a period of 5 years.

Management determines budgeted gross margins based on past results and market development expectations. Average growth rates are consistent with those prevailing in the industry. The discount rates used are pre-tax or post-tax, as applicable, and reflect the specific risks associated with the CGUs evaluated.

b) Trademarks

This item mainly includes the brands acquired in the business combination processes with Vial y Vives S.A.C. (S/75.4 million) in August 2013, Morelco S.A.S. (S/33.33 million) in December 2014 and Adexus S.A. (S/9.1 million) in August 2016. Management determined that the trademark from Vial y Vives, Morelco and Adexus have indefinite useful lives; consequently, annual impairment tests are performed on these intangible assets as explained in paragraph a) above.

As a result of these evaluations, as of December 31, 2019, the Vial y Vives - DSD the trademark impairment was reversed for S/20.7 million (equivalent to CLP4,782 million). Management considered that the market value of the trademark has increased due to the increase of projects in execution and projects and award process. In 2018, no provision for impairment was recorded. As of December 31, 2017, the Vial y Vives - DSD trademark partially deteriorated, the amount of the impairment was S/29.5 million.

Additionally, in 2019, the Company impaired the value of the Adexus trademark, because the subsidiary submitted a request for bankruptcy reorganization before the courts of justice of Chile, under the law 20,720 of that country (Note 36 B).

F-85

The main assumptions used by the Group to determine fair value less cost of sales are as follows:

	Engineering and construction
	Morelco			Vial y Vives- DSD
	%			%
2017
Average revenue growth rate		9.60	%		25.00	%
Terminal growth rate		3.00	%		4.00	%
Discount rate		11.18	%		14.80	%
2018
Average revenue growth rate		12.25	%		19.58	%
Terminal growth rate		3.00	%		3.00	%
Discount rate		12.55	%		14.00	%
2019
Average revenue growth rate		5.70	%		19.58	%
Terminal growth rate		3.00	%		2.00	%
Discount rate		11.83	%		14.12	%

c) Concessions

As of December 31, mainly include intangibles of Norvial S.A.:

	2018		2019
EPC Contract		70,133		62,319
Construction of the second tranch of the “Ancon- Huacho-Pativilca” highway		12,463		4,809
Cost of capitalized indebtedness at effective interest rates between 7.14% and 8.72%		9,836		950
Road improvement		15,558		14,449
Implementation for road safety		6,283		8,152
Work capitalization of second roadway		310,417		314,614
Disbursements for land adquisition		4,757		4,233
Other intangible assets contracted for the delivery process		6,775		7,477
Total Norvial S.A.		436,222		417,003
Other concessions		45,818		26,947
		482,040		443,950

d) Cost of well’s development

Through one of its subsidiaries, GMP S.A., the Group operates and extracts oil from two fields (Lot I and Lot V) located in the province of Talara, in northern Peru. Both fields are operated under long-term service contracts in which the Group provides hydrocarbon extraction services to Perupetro. The expiration date of these contracts are December 2021 and October 2023 for Lot 1 and Lot V, respectively.

On December 10, 2014, the Peruvian State granted the subsidiary GMP S.A. the right to exploit for 30 years the oil lots III and IV (owned by the Peruvian State - Perupetro) located in the Talara basin, Piura. The investment committed is estimated at US$400 million and corresponds to the drilling of 230 wells in Lot III and 330 wells in Lot IV. The drilling began in April 2015 in both lots.

F-86

As part of the Group’s obligations under the infrastructure, it is necessary to incur certain costs to prepare the wells located in Lots I, III, IV and V. These costs are capitalized as part of the intangible assets with a value of S/108 million during 2019 (S/68 million in 2018 and S/99 million in 2017), which includes the capitalization of the provision for dismantling wells and facilities in Lots I, III, IV and V, for S/36 million (S/3 million during 2018).

The lots are amortized on the basis of the useful lives of the wells (determined as five years for lots I and V and units produced for lots III and IV), which is less than the total service contract period with Perupetro.

e) Amortization of intangible assets

Amortization of intangibles is broken down in the consolidated income statement as follows:

	2017		2018		2019
Cost of sales and services (Note 26)		67,381		98,318		99,589
Administrative expenses (Note 26)		3,002		4,856		5,689
(+) Amortization discontinued operations		16,174		8,898		—
		86,557		112,072		105,278

18 BORROWINGS

As of December 31, this item includes:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Bank overdrafts (Note 9)		119		—		119		—		—		—
Bank loans (a)		1,023,481		553,658		810,188		424,362		213,293		129,296
Finance leases (b)		33,488		22,980		13,514		9,749		19,974		13,231
Lease liability for right-of-use asset (c)		—		80,216		—		18,246		—		61,970
Other financial entities (d)		145,584		142,212		2,653		1,903		142,931		140,309
		1,202,672		799,066		826,474		454,260		376,198		344,806

F-87

a) Bank Loans

As of December 31, 2018, and 2019 includes bank loans in local and foreign currency for working capital. These obligations bear fixed interest rates ranging from 1.6% to 15.8% in 2018 and from 1.0% to 12.0% in 2019.

				Current						Non-current
	Interest	Date of		At December, 31						At December, 31
	rate	maturity		2018			2019			2018			2019
GyM S.A.	1.00% / 11.00%		2022		227,770			170,798	(iii)		—			26,401
Graña y Montero S.A.A.	9.10% / 10.10%		2022		206,836	(ii)		112,854	(iv)		125,547	(i)		—
Viva GyM S.A.	7.00% / 12.00%		2020		129,617			110,343			2,102			—
GMP S.A.	5.05% / 6.04%		2026		22,587			30,367			85,644			102,895
GyM Ferrovías S.A.	Libor USD 1M + 2%		2019		209,463			—			—			—
Concar S.A.	15.75%		2019		13,915			—			—			—
					810,188			424,362			213,293			129,296

i) Credit Suisse Syndicated Loan

In December 2015, the Company entered a US$200 million (equivalent to S/672 million) medium-term loan agreement with Credit Suisse AG, Cayman Islands Branch and Credit Suisse Securities (USA) LLC. The loan term is five years with quarterly installments starting on the 18th month. The loan bears interest at a rate of three months Libor plus 4.9% per year. The funds were used to finance the equity participation in GSP. On June 27, 2017, the Company renegotiated the terms of this loan to correct defaults related to the cancellation of the GSP concession. On June 26, 2019, the capital balance of the loan was paid in full (As of December 31, 2018, the principal balance of the loan amounts to US$37.5 million (equivalent to S/126.7 million).

ii) GSP Bridge Loan

As of December 31, 2016, the balance of bank loans included US$129 million (S/433 million) of the corporate guarantee issued by the Company to guarantee the bridge loan granted to GSP, However, on June 27, 2017, the Company reached a refinancing agreement with Natixis, BBVA, SMBC and MUFJ for US$78.7 million (S/256.3 million), this amount was used to repay the GSP bridge loan. The new loan matures in June 2020.

On June 28, 2019, the capital balance of the loan was paid in full, (As of December 31, 2018 the principal balance of the loan was US$63.5 million (equivalent to S/214.5 million).

iii) Financial Stability Framework Agreement

On July 31, 2017, the Company, and certain of our subsidiaries, GyM S.A., Construyendo Pais S.A., Vial y Vives — DSD and Concesionaria Vía Expresa Sur S.A., entered into a Financial Stability Framework Agreement (together with certain complementary contracts, the “Framework Agreement”) with the following financial entities: Scotiabank Perú S.A., Banco Internacional del Perú S.A.A., BBVA Banco Continental, Banco de Crédito del Perú, Citibank del Peru SA and Citibank N.A. The Framework Agreement aims to: (i) grant GyM S.A. a syndicated revolving line of credit for working capital for up to US$1.6 million and S/143.9 million, which may be increased by an additional US$14 million subject to certain conditions; (ii) grant GyM S.A. a line of credit of up to US$51.6 million and S/33.6 million; (iii) grant the Company, GyM S.A., Construyendo Pais S.A., Vial y Vives – DSD and Concesionaria Vía Expresa Sur S.A. a non-revolving line of credit to finance reimbursement obligations under performance bonds; (iv) grant a syndicated line of credit in favor of the Company and GyM S.A. for the issuance of performance bonds up to an amount of US$100 million (which may be increased by an additional US$50 million subject to compliance with certain conditions); and (v) to commit to maintain existing standby letters of credit issued at the request of GyM S.A. and the Company, as well as the request of Construyendo Pais S.A., Vial y Vives – DSD and Concesionaria Vía Expresa Sur S.A. In April of 2018, the Group repaid US$72.7 million (equivalent to S/245.8 million) of the facility with the proceeds of the sale of Stracon GyM S.A., and in July of 2018, an additional of US$15.4 million (equivalent to S/52.1 million). In August 2019, the Group paid the entire balance of Tranche B, equivalent to S/9.7 million and US$9.2 million. In September and October 2019, Tranche A was partially paid for S/.0.4 million and US$0.1 million; and S/0.5 million, respectively.

F-88

As of December 31, 2019, and the date of this annual report, there was US$44.2 million (equivalent to S/146.6 million).

GyM S.A. requested a waiver for a change in the Financial Stability Framework Agreement, in which at least 50% of the amount of Tranche A and up to 50% of the amount of Tranche A (project valuations) should be presented; the request was accepted by the lenders. As of December 31, 2019, and the date of this report, the value of client invoices and the value of project valuations is 65% and 134%, respectively, both percentages comply with the provisions of the approved waivers.

As of December 31,2019 and the date of this report, GyM S.A. is in compliance with the ratios established under the Financial Stability Framework Agreement and its waivers.

iv) CS Peru Infrastructure Holdings LLC Loan

In July 2019, the Company entered into a medium-term loan credit agreement for up to US$35 million with CS Peru Infrastructure Holdings LLC. The term of the loan is three years, with quarterly installments of principal starting on the 18th month. The loan accrued interest at the following rates per annum: (i) for the period from and including July 31, 2019 (“Closing Date”) to but excluding the date that is 6 months after the Closing Date, 9.10%; (ii) for the period from and including the date that is 6 months after the Closing Date to but excluding the date that is one year after the Closing Date, 9.35%; (iii) for the period from and including the date that is one year after the Closing Date to but excluding the date that is 30 months after the Closing Date, 9.60%; and (iv) for the period from and including the date that is 30 months after the Closing Date to the third anniversary of the Loan, 10.10%.

The proceeds were used for working capital in the Company, GyM S.A. and Adexus S.A. As of the date of this report, the principal amount outstanding under this loan is still US$35 million (equivalent to S/112.9 million).

On November 21, 2019, due to the filing of a preventive bankruptcy process by its Chilean subsidiary, Adexus S.A., the Company received a communication from CS Peru Infrastructure Holdings LLC informing of the occurrence of an event of default under the terms of the credit agreement, according to section 7.02(e) and 9.09 of the agreement. As a result, as of December 2019, the loan was classified as current liabilities. However, as of February 2020, the Company obtained the waiver, therefore as of the date of this report, the loan was reclassified to non-current liabilities.

b) Financial Leases

					Current				Non-current
	Interest		Date of		At December, 31				At December, 31
	rate		maturity		2018		2019		2018		2019
Viva GyM S.A.		7.79% / 9.04%		2023		3,488		4,297		8,582		7,399
GyM S.A.		1.98% / 9.07%		2023		4,523		3,395		9,314		5,678
GMP S.A.		4.02% / 6.28%		2022		4,034		1,511		1,522		154
Concar S.A.		4.30% / 5.05%		2020		1,469		546		556		—
						13,514		9,749		19,974		13,231

F-89

The minimum payments to be made according to their maturity and the present value of the leasing obligations are as follows:

	At December 31,
	2018			2019
Up to 1 year		15,151			10,826
From 1 to 5 years		21,583			16,813
		36,734			27,639
Future financial charges		(3,246	)		(4,659	)
Present value of the obligations for finance lease contracts		33,488			22,980

The present value of the finance lease agreements obligations are as follows:

	At December 31,
	2018		2019
Up to 1 year		13,514		9,749
From 1 year to 5 years		19,974		13,231
		33,488		22,980

c) Lease liability for right-of-use asset (Note 3.1)

						At December, 31
	Interest			Date of		2019
	rate			maturity		Current		Non-current
GMP S.A.		6.59% / 7.80	%		2023		10,584		10,261
Graña y Montero S.A.A.		7.88	%		2027		4,888		50,362
GyM S.A.		7.65	%		2022		1,592		541
Concar S.A.		5.55	%		2024		1,171		806
Other minors		6.31% / 10.00	%		2020		11		—
							18,246		61,970

The minimum payments to be made according to their maturity and the present value of the lease liability for right-of-use asset obligations are as follows:

	At December 31, 2019
Up to 1 year		24,966
From 1 to 5 years		69,955
Over 5 years		7,603
		102,524
Future financial charges		(22,308	)
Present value of the lease liability for right-of-use asset obligations		80,216

F-90

The present value of the lease liability for right-of-use asset obligations are as follows:

	At December 31, 2019
Up to 1 year		18,246
From 1 year to 5 years		54,595
Over 5 years		7,375
		80,216

d) Other financial entities

Monetization of Norvial dividends

On May 29, 2018, an investment agreement was signed between the Company and Inversiones Concesion Vial S.A.C. (“BCI Peru”) - with the intervention of Fondo de Inversion BCI NV (“Fondo BCI”) and BCI Management Administradora General de Fondos S.A. (“BCI Asset Management”) to monetize the future dividends on Norvial S.A. that our Company will receive. The transaction amount was US$42.3 million (equivalent to S/138 million) and was completed on June 11, 2018.

It has also been agreed that the Company will have call options on 48.8% of the economic rights of Norvial that BCI Peru will maintain through its participation in Inversiones en Autopistas S.A. Such options will be subject to certain conditions such as the maturity of different terms, recovery of the investment made with the funds of the BCI Fund (according to different economic estimates) and/or the occurrence of a change of control. As of December 31, 2019, the balance of the loan payable amounts to S/142.2 million (S/145.6 million as of December 31, 2018).

e) Fair value of debt

The book value and fair value of financial liabilities are as follows:

	Carrying amount				Fair value
	At December, 31				At December, 31
	2018		2019		2018		2019
Bank overdrafts		119		—		119		—
Bank loans		1,023,481		553,658		1,152,885		572,019
Finance leases		33,488		22,980		38,399		23,027
Lease liability for right-of-use asset		—		80,216		—		96,799
Other financial entities		145,584		142,212		145,584		142,212
		1,202,672		799,066		1,336,987		834,057

In 2019, fair values are based on discounted cash flows using debt rates between 2.9% and 11.0% (between 2.4% and 8.9% in 2018) and are within level 2 of the fair value hierarchy.

F-91

19 BONDS

As of December 31, this item includes:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
GyM Ferrovías S.A. (a)		611,660		618,497		13,422		15,742		598,238		602,755
Norvial S.A. (b)		325,382		305,545		25,745		28,995		299,637		276,550
		937,042		924,042		39,167		44,737		897,875		879,305

a) GyM Ferrovias S.A.

In February 2015, the subsidiary GyM Ferrovías S.A. issue corporate bonds under Regulation S of the United States of America. The issuance was made in VAC soles (adjusted for the Constant Update Value) for an amount of S/629 million. The bonds expire in November 2039 and accrue interest at a rate of 4.75% (plus the VAC adjustment), present a risk rating of AA + (local scale) granted by Support & International Associates Risk Classifier. As of December 31, 2019, an accumulated amortization amounting to S/79 million (S/67.7 million as of December 31, 2018) has been made.

As of December 31, 2019, the balance includes accrued interest payable and VAC adjustments for S/86.8 million (S/72 million as of December 31, 2018).

As of December 31, 2017, 2018 and 2019, the movement of this account is as follows:

	2017			2018			2019
Balance at January, 1		604,031			603,657			611,660
Amortization		(19,141	)		(10,178	)		(11,330	)
Accrued interest		49,132			48,130			48,253
Interest paid		(30,365	)		(29,949	)		(30,086	)
Balance at December, 31		603,657			611,660			618,497

As part of the bond structuring process, GyM Ferrovías S.A. pledged to report and verify compliance with the following, measured according to their individual financial statements (covenants):

• Debt service coverage ratio not less than 1.2 times;

• Maintain a minimum balance in the trust equal to one-quarter of operating and maintenance costs (including VAT);

• Maintain a constant balance in the minimum trust equal to the following two coupons according to the bond schedule.

On August 23, 2017, GyM Ferrovias S.A. and Line One CPAO Purchaser LLC signed the purchase-sale contract and assignment of collection rights for the “Annual Payment for Complementary Investment (PAO Complementary)” derived from the Concession Contract for an amount equivalent to US$316 million. The last payment for the sale of the CPAO was mad on December 10, 2019.

On August 23, 2017, GyM Ferrovias S.A. as Borrower, Mizuho Bank, Ltd., and Sumitomo Mitsui Banking Corporation as Lenders and Mizuho Bank, Ltd. as Administrative Agent signed a Working Capital loan agreement for an amount equivalent to US$80 million to partially finance the Lima Metro Line 1 Expansion Project. In May 2019, the Working Capital loan was fully prepaid and the Working Capital Loan Agreement terminated. (As of December 31, 2018, the account payable amounted to US$62 million).

F-92

b) Norvial S.A.

Between 2015 and 2016, the subsidiary, Norvial S.A., issued the First Corporate Bond Program on the Lima Stock Exchange for S/365 million. The rating companies Equilibrium Risk and Apoyo & Asociados Internacionales gave the rating of AA to this debt instrument.

The purpose of the awarded funds was to finance the construction works of the Second Stage of the Road Network No. 5 and the financing of the VAT linked to the execution of the expenses of the Project.

As of December 31, 2017, 2018, and 2019, the movement in this account is as follows:

	2017			2018			2019
Balance at January, 1		363,684			343,910			325,382
Amortization		(20,010	)		(18,736	)		(20,005	)
Accrued interest		2,987			24,170			23,482
Capitalized interest		26,011			3,361			2,725
Interest paid		(28,762	)		(27,323	)		(26,039	)
Balance at December, 31		343,910			325,382			305,545

As part of the bond structuring process, Norvial S.A. undertook to periodically report and verify compliance with the following covenants:

• Debt service coverage ratio not less than 1.3 times;

• Proforma leverage ratio less than 4 times.

The fair value of both obligations at December 31, 2019 amounts to S/1,014 million (at December 31, 2018, amounts to S/1,037 million), and is based on discounted cash flows using rates between 4.32% and 7.59% (between 4.09% and 5.45% at December 31, 2018) corresponding to level 2 of the fair value hierarchy.

As of December 31, 2018, and 2019, the Company has complied with the covenants of both types of bonds.

20 TRADE ACCOUNTS PAYABLE

As of December 31, this item includes:

	2018		2019
Invoices payable (a)		591,619		352,287
Provision of contract costs (b)		378,670		746,408
Notes payable		109,242		37,426
		1,079,531		1,136,121

F-93

(a) Invoices payable are obligations accredited with formal documents. The following are the invoices payable according to main projects:

	2018		2019
Infrastructure
Linea 1 - Metro de Lima		93,463		15,125
Oil services		49,254		46,932
Operation and maintenance - Roads		60,334		16,131
		203,051		78,188
Engineering and Construction
Works and Consortiums		128,159		64,571
Talara Refinery		101,103		59,740
Engineering and Construction Works VYV - DSD Chile Ltda.		26,184		26,368
Civil Works, Assembly and Electromechanics - Toquepala		23,957		10,325
North Concentrator Plant - Quellaveco		7,564		26,589
Engineering and Construction Works - Morelco S.A.S.		19,504		8,141
Generating Plant Machu Picchu		7,789		6,575
Project Mina Gold Fields La Cima S.A.		5,060		5,302
Civil works, assembly and electromechanics - Acero Arequipa		3,062		5,421
Others		5,319		15,091
		327,701		228,123
Real Estate		18,365		26,072
Parent Company Operation		42,502		19,904
		591,619		352,287

F-94

b) Provision of contract costs are obligations not accredited with formal documents. Below are the services received not billed according to main projects:

	2018		2019
Infrastructure
Linea 1 - Metro de Lima		11,189		13,383
Oil services		—		20,512
Operation and maintenance - Roads		1,020		18,763
		12,209		52,658
Engineering and Construction
Talara Refinery		115,870		418,540
Works and Consortiums		105,681		68,239
Engineering and Construction Works VYV - DSD		51,412		68,140
Engineering and Construction Works - Morelco SAS		27,570		34,804
North Concentrator Plant - Quellaveco		10,030		24,185
Mina Project of Gold Fields La Cima S.A.		8,520		15,050
Civil Works, Assembly and Electromechanics - Acero Arequipa		4,932		17,382
Civil Works, Assembly and Electromechanics - Toquepala		5,283		5,055
Generating Plant Machu Picchu		2,376		4,633
Others		8,513		23,063
		340,187		679,091
Real Estate		12,808		13,573
Parent Company Operation		13,466		1,086
		378,670		746,408

21 OTHER ACCOUNTS PAYABLE

As of December 31, this item includes:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Advances received from customers (a)		496,547		307,839		301,868		270,714		194,679		37,125
Consorcio Ductos del Sur - payable (b)		234,978		148,076		—		—		234,978		148,076
Salaries and other payable		97,774		87,869		97,774		87,869		—		—
Put option liability on Morelco acquisition (Note 32-b)		103,649		106,444		—		71,341		103,649		35,103
Third-party loans		11,560		11,619		11,560		9,545		—		2,074
Other taxes payable		132,775		104,444		111,444		84,235		21,331		20,209
Acquisition of non-controlling interest (Note 35-a)		22,963		22,697		22,963		22,697		—		—
Guarantee deposits		15,137		13,201		15,137		13,201		—		—
Consorcio Rio Mantaro - payables		35,531		35,625		35,531		35,625		—		—
Other accounts payables		55,865		70,592		36,392		40,078		19,473		30,514
		1,206,779		908,406		632,669		635,305		574,110		273,101

(a) Advances received from customers relate mainly to construction projects, and are discounted from invoicing, in accordance with the terms of the contracts.

F-95

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Advances Customers Consortiums		154,660		115,250		146,764		113,093		7,896		2,157
Autoridad Autonoma del Sistema Electrico de Transporte		164,218		—		9,781		—		154,437		—
Customer advances for real estate projects		67,519		66,258		67,519		66,258		—		—
Concentradora Norte - Quellaveco		—		64,118		—		44,932		—		19,186
Special National Transportation Infrastructure Project		69,943		42,030		38,959		26,534		30,984		15,496
Talara Refinery		10,835		—		10,835		—		—		—
Others		29,372		20,183		28,010		19,897		1,362		286
		496,547		307,839		301,868		270,714		194,679		37,125

(b) The other accounts payable of Consorcio Constructor Ductos del Sur correspond to payment obligations to suppliers and the main subcontractors for S/235 million, assumed by the subsidiary GyM S.A; as a result of the termination of GSP operations.

The fair value of short-term accounts approximates their book value due to their short-term maturities. The non-current part mainly includes non-financial liabilities such as advances received from customers; the remaining balance is not significant in the financial statements for the periods shown.

22 OTHER PROVISIONS

At December 31, this item includes:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Legal contingencies		84,728		278,319		6,049		103,635		78,679		174,684
Contingent liabilities from the acquisition of subsidiaries		4,498		—		—		—		4,498		—
Provision for well closure (Note 5.1 d)		20,382		50,116		148		9,848		20,234		40,268
		109,608		328,435		6,197		113,483		103,411		214,952

Additions for legal claims correspond to:

i) Provision for civil reparation

As of December 31, 2019, the Group updated the present value of the estimated provision amounting to S/154 million (S/73.5 million as of December 31, 2018), corresponding to the legal contingency estimated by the Management for exposure of the Company and its subsidiaries to the probable imposition of an obligation to compensate the government in relation to their participation as minority partners in certain entities that developed infrastructure projects in Peru with companies belonging to the Odebrecht group and in projects associated with the Construction Club.

ii) Class Action

Two class action lawsuits have been filed against the company and certain of our former officials in before the United States Court for the Eastern District of New York during the first quarter of 2017 that were later consolidated into a single claim. The plaintiffs allege that during the class period the Company obtained equity investments from investors based on false and misleading statements that were made in breach of the Securities Act and that caused material losses to such investors In particular, it is complaint alleges that the defendant did not disclose, among other things, that: a) the Company knew that its partner Odebrecht was involved in illegal activities; and that, b) the Company profited from such activities in violation of its own corporate governance rules.

F-96

As of the date of this report, the Company has entered into term sheet with the plaintiffs’ counsel, whereby the parties undertake to ensure the termination of the class action, through the negotiation, conclusion and filing of the final settlement agreement before court. The amount stipulated for the termination of the class action equals to US $ 20 million. As of December 31, 2019, the Company has made a provision of S/49.8 million (US $ 15 million) and the surplus of US $ 5 million will be covered by a professional liability policy pursuant to settlement agreement entered with the insurer.

iii) Other provisions

Other provisions correspond mainly to claims received from clients for S/46 million in the subsidiary GyM S.A.

The gross movement of other provisions is as follows:

Other provisions	Legal contingencies			Contingent liabilities resulting from acquisitions			Provision for well closure			Total
At January 1, 2017		15,732			8,125			17,216			41,073
Additions		9,510			—			—			9,510
Reversals of provisions		(235	)		(809	)		(412	)		(1,456	)
Payments		(1,680	)		—			—			(1,680	)
Translation adjustments		37			(67	)		—			(30	)
At December 31, 2017		23,364			7,249			16,804			47,417
Additions		75,369			—			3,578			78,947
Reversals of provisions		(4,875	)		(1,343	)		—			(6,218	)
Deconsolidation of subsidiaries		(2,340	)		—			—			(2,340	)
Reclasification liabilities classified as held for sale		—			(1,093	)		—			(1,093	)
Payments		(6,615	)		—			—			(6,615	)
Translation adjustments		(175	)		(315	)		—			(490	)
At December 31, 2018		84,728			4,498			20,382			109,608
Additions		197,721			—			30,998			228,719
Reversals of provisions		(3,122	)		(4,349	)		—			(7,471	)
Payments		(914	)		—			(1,264	)		(2,178	)
Translation adjustments		(94	)		(149	)		—			(243	)
At December 31, 2019		278,319			—			50,116			328,435

23 EQUITY

a) Capital

The General Shareholders’ Meeting held on November 6, 2018, approved a capital increase of up to US$130 million equivalent to 211,864,407 shares at a price of US$0.6136. As of December 31, 2018, during the first stage of the placement and the conclusion of two preferred subscription rounds, a total of 69,380,402 shares were subscribed. Therefore, the Company’s capital is represented by 729,434,192 shares with a par value of S/1.00 each, out of which 660,053,790 are registered in the Public Registry, and 69,380,402 are in the process of registration.    

F-97

On April 2, 2019, the Company concluded the capital increase process by completing the subscription of 142,483,663 new common shares, therefore the capital of the company is represented by S/871,917,855, after the end of the private offer and considering the contributions made during the 2 preferential subscription wheels.

As of December 31, 2018, a total of 207,931,660 shares were represented in ADS, equivalent to 41,586,332 ADS at a rate of 5 shares per ADS; and 218,043,480 shares were represented in ADS equivalent to 43,608,696 ADS as of December 31, 2019.

As of December 31, 2019, the Company’s shareholding structure is as follows:

Percentage of individual interest in outstanding capital	Number of shareholders		Total percentage of interest
Up to 1.00		1,725		12.19	%
From 1.01 to 5.00		16		30.98	%
From 5.01 to 10.00		2		18.34	%
Over 10		2		38.49	%
		1,745		100.00	%

At December 31, 2019, the Company’s shares registered a stock price at the end of the year of S/1.70 per share and a trading frequency of 95.24% (S/1.99 per share and a trading frequency of 91.6% at 31 December 2018).

b) Legal reserve

In accordance with the Peruvian General Law of Corporations, the legal reserve of the Company is constituted with the transfer of 10% of the annual profit until reaching an amount equivalent to 20% of the paid-in capital. In the absence of profits or unrestricted reserves, the legal reserve must be applied to the compensation of losses and must be replenished with the profits of subsequent years. This reserve may be capitalized; and its replacement is also mandatory.

c) Voluntary reserve

As of December 31, 2018, and 2019, this S/29.97 million reserve is related to the excess of the legal reserve; this reserve is above the requirement to constitute a reserve until it reaches the equivalent of 20% of the paid-in capital.

d) Share premium

This item includes the excess of total income obtained by shares issued in 2013 compared to their nominal value of S/1,055.5 million and by shares issued in 2018 and 2019 an amount of S/68.2 million and S/138.9 million, respectively.

In addition, this account recognizes the difference between the nominal value and the transaction value for acquisitions of shares in non-controlling interests.

e) Retained earnings

Dividends distributed to shareholders other than domiciled legal entities are subject to the rates of 4.1% (earnings until 2014), 6.8% (2015 and 2016 earnings) and 5.00% (2017 and thereafter) for income tax charged to these shareholders; such tax is withheld and settled by the Company. Dividends for fiscal years 2018 and 2019 were not distributed (Note 33).

F-98

24 DEFERRED INCOME TAX

Deferred income tax is classified by its estimated reversal term as follows:

	At December 31,
	2018			2019
Deferred income tax asset:
Reversal expected in the following twelve months		48,889			37,927
Reversal expected after twelve months		376,547			202,992
Total deferred tax asset		425,436			240,919
Deferred income tax liability:
Reversal expected in the following twelve months		(9,067	)		(19,791	)
Reversal expected after twelve months		(66,280	)		(92,943	)
Total deferred tax liability		(75,347	)		(112,734	)
Deferred income tax asset, net		350,089			128,185

The gross movement of the deferred income tax item is as follows:

	At December 31,
	2017			2018			2019
Opening balance		353,839			364,225			350,089
Debit (credit) to income statement (Note 29)		42,599			25,118			(206,273	)
Adjustment for changes in rates of income tax		1,951			(1,524	)		(622	)
Sale of a subsidiary		(12,160	)		(40,460	)		—
IFRIC 23 adoption		—			—			(986	)
Debit (credit) to equity		(16,804	)		(95	)		(3	)
Other movements		(5,200	)		2,825			(14,020	)
Final balance		364,225			350,089			128,185

F-99

The movement in deferred tax assets and liabilities in the year, without considering the offsetting of balances, is as follows:

Deferred income tax liabilities	Difference in depreciation rates			Deferred income		Work in process			Tax receivable		Borrowing costs capitalized			Purchase price allocation			Others			Total
At January 1, 2017		61,750			—		8,242			28,867		21,418			27,118			13,164			160,559
(Charge) credit to P&L		104,101			—		(5,712	)		3,322		(1,473	)		(11,780	)		(3,724	)		84,734
Sale of subsidiary		—			—		—			—		—			—			(83	)		(83	)
At December 31, 2017		165,851			—		2,530			32,189		19,945			15,338			9,357			245,210
(Charge) credit to P&L		(74,679	)		13,574		2,926			689		(4,229	)		(11,699	)		7,828			(65,590	)
Sale of subsidiary		(16,189	)		—		—			—		—			(5,201	)		(3,377	)		(24,767	)
At December 31, 2018		74,983			13,574		5,456			32,878		15,716			(1,562	)		13,808			154,853
(Charge) credit to P&L		9,937			10,571		33,403			3,312		(780	)		11,385			18,821			86,649
At December 31, 2019		84,920			24,145		38,859			36,190		14,936			9,823			32,629			241,502

F-100

Deferred income tax assets	Provisions			Accelerated tax depreciation			Tax losses			Work in process			Accrual for unpaid vacations			Investments in subsidiaries			Impairment			Tax Goodwill			Others			Total
At January 1, 2017		105,679			16,381			153,083			17,614			12,972			608			172,052			20,525			15,484			514,398
Charge (credit) to P&L		(12,614	)		79,637			(8,555	)		21,873			2,166			118			28,593			(112	)		18,358			129,464
Charge (credit) to equity		(8,882	)		—			—			—			—			—			(7,493	)		—			(347	)		(16,722	)
Reclassification		(30,901	)		—			—			—			—			(726	)		31,627			—			—			—
Sale of subsidiary		(683	)		(9,367	)		(438	)		—			(1,697	)		—			—			—			(236	)		(12,421	)
Others		(160	)		—			(1	)		—			(1	)		—			1			—			(5,123	)		(5,284	)
At December 31, 2017		52,439			86,651			144,089			39,487			13,440			—			224,780			20,413			28,136			609,435
Charge (credit) to P&L		702			(83,561	)		25,733			(5,482	)		1,784			—			35,289			(2,365	)		(14,096	)		(41,996	)
Charge (credit) to equity		—			—			—			—			—			—			—			—			(95	)		(95	)
Sale of subsidiary		(14,775	)		(2,169	)		(33,512	)		—			(6,215	)		—			(6,462	)		—			(944	)		(64,077	)
Others		—			—			—			—			—			—			—			—			1,675			1,675
At December 31, 2018		38,366			921			136,310			34,005			9,009			—			253,607			18,048			14,676			504,942
Charge (credit) to P&L		804			7,512			14,343			11,715			1,842			—			(205,265	)		(4,526	)		53,329			(120,246	)
Charge (credit) to equity		—			—			—			—			—			—			—			—			(3	)		(3	)
IFRIC 23 adoption		—			—			(986	)		—			—			—			—			—			—			(986	)
Others		—			—			—			—			—			—			—			—			(14,020	)		(14,020	)
At December 31, 2019		39,170			8,433			149,667			45,720			10,851			—			48,342			13,522			53,982			369,687

F-101

As of December 31, 2019, the total tax loss amounts to S/517.3 million and is composed as follows:

	Tax		Tax loss aplication		Application						Statute of
	loss		method		2020		2021		Forward		limitations
GyM S.A.		328,946		B		23,985		13,270		291,691
Vial y Vives-DSD S.A.		115,027		N/A		71,010		6,018		37,999
Viva GyM S.A.		21,530		A		16,917		4,613		—		2022
Graña y Montero S.A.A.		17,875		A		—		—		17,875		2022
TGNCA S.A.C.		15,989		B		—		—		15,989
Morelco S.A.S.		5,650		N/A		5,650		—		—
GMP S.A.		4,869		A		4,869		—		—		2021
GyM Chile S.p.A.		4,052		N/A		—		—		4,052
Survial S.A.		2,053		A		1,437		616		—		2023
Incolur DSD		1,278		N/A		—		—		1,278
Others		47				47		—		—
		517,316				123,915		24,517		368,884

According to Peruvian legislation, there are two ways to compensate for tax losses:

1. System A, it allows offseting offset the tax loss in future years up to the following four (4) years from the date the loss is incurred.

2. System B. The tax loss may be offset in future years up to 50% of the net rent of each year. This option does not consider a statute of limitations.

The taxable goodwill relates to the tax credit generated in the reorganization of the Chilean subsidiaries in 2014, in accordance with such legislation. In 2016, the arbitration related to the Collahuasi project was closed, and an additional payment to the sellers of the Chilean subsidiary was determined, which originated the increase of this temporary item.

Deferred income corresponds to income that, according to Colombian tax regulations, is not recognized as such for tax purposes until certain requirements are met.

25 WORKERS’ PROFIT SHARING

The distribution of the workers’ profit sharing in the income statement for the years ended December 31 is shown below:

	2017		2018		2019
Cost of sales of goods and services		2,215		5,274		4,661
Administrative expenses		7,562		2,588		1,679
		9,777		7,862		6,340

F-102

26 COSTS AND EXPENSES BY NATURE

For the years ended December 31, the detail of this item is as follows:

	Cost of goods and services		Administrative expenses		Total
2017
Services provided by third-parties		1,268,665		104,950		1,373,615
Salaries, wages and fringe benefits (i)		919,409		134,695		1,054,104
Purchase of goods		856,745		140		856,885
Other management charges		235,102		48,057		283,159
Depreciation		103,566		5,776		109,342
Amortization		67,381		3,002		70,383
Impairment of inventories		40,592		—		40,592
Impairment of property, plant and equipment		11,928		20		11,948
Taxes		7,470		7,408		14,878
Impairment of accounts receivable (ii)		703		18,406		19,109
		3,511,561		322,454		3,834,015

	Cost of goods and services			Administrative expenses		Total
2018
Services provided by third-parties		1,064,687			98,060		1,162,747
Salaries, wages and fringe benefits (i)		817,392			105,505		922,897
Purchase of goods		755,209			—		755,209
Other management charges		375,308			43,533		418,841
Amortization		98,318			4,856		103,174
Depreciation		81,199			5,135		86,334
Impairment of accounts receivable (ii)		45,658			19,418		65,076
Taxes		8,727			1,926		10,653
Impairment of property, plant and equipment		5,468			—		5,468
Inventory recovery		(26,993	)		—		(26,993	)
		3,224,973			278,433		3,503,406

	Cost of goods and services			Administrative expenses		Total
2019
Services provided by third-parties		1,450,577			58,728		1,509,305
Salaries, wages and fringe benefits (i)		951,455			117,426		1,068,881
Purchase of goods		855,743			—		855,743
Other management charges		174,678			27,708		202,386
Amortization		99,589			5,689		105,278
Depreciation		95,445			1,907		97,352
Impairment of accounts receivable (ii)		4,900			—		4,900
Taxes		6,941			2,450		9,391
Impairment of property, plant and equipment		3,907			—		3,907
Impairment of investments		255			—		255
Inventory recovery		(249	)		—		(249	)
		3,643,241			213,908		3,857,149

F-103

(i) For the years ended on December 31, salaries, wages and fringe benefits comprise the following:

	2017		2018		2019
Salaries		747,195		629,641		786,346
Statutory gratification		106,797		80,697		88,369
Social contributions		76,330		73,297		61,533
Employee’s severance indemnities		43,399		50,852		49,944
Vacations		33,603		39,221		39,298
Workers’ profit sharing (Note 25)		9,777		7,862		6,340
Others		37,003		41,327		37,051
		1,054,104		922,897		1,068,881

(ii) For the years ended December 31, the impairment of accounts receivable includes the following:

	2017		2018		2019
Trade accounts receivables		724		3,065		955
Other accounts receivable		—		44,252		2,421
Accounts receivable from related parties		18,385		17,759		1,524
		19,109		65,076		4,900

27 FINANCIAL INCOME AND EXPENSES

For the years ended on December 31, these items include the following:

	2017			2018			2019
Financial income:
Interest on loans to third parties		577			27,060			36,876
Fair value of accounts receivables		—			9,786			30,408
Interest on short-term bank deposits		5,123			3,811			4,056
Commissions and collaterals		12			1,448			535
Exchange rate gain, net		5,603			—			—
Others		2,427			8,820			2,781
		13,742			50,925			74,656
Financial expenses:
Interest expense:
- Bank loans		93,238			90,349			78,293
- Bonds		28,804			27,388			26,113
- Commissions and collaterals		15,537			31,668			24,521
- Loans from third parties		6,784			31,296			14,162
- Right-of-use		—			—			5,472
- Financial lease		4,722			2,908			2,042
Loss by measurement of financial asset fair value		8,059			25,796			41,131
Exchange difference loss, net		—			23,276			32,570
Derivative financial instruments		739			268			92
Other financial expenses		24,802			23,200			14,542
Less capitalized interest		(31,908	)		(8,167	)		(7,229	)
		150,777			247,982			231,709

F-104

28 OTHER INCOME AND EXPENSES, NET

For the years ended December 31, these items include the following:

	2017			2018			2019
Other income:
Profit from Mizuho Agreement (a)		—			—			89,688
Recovery of provisions and accounting impairments		—			—			23,279
Trademarks revaluation		—			—			20,676
Supplier debt forgiveness		—			—			19,026
Sale of fixed assets		93,013			26,007			12,748
Sale of investments		—			13,475			—
Present value of the liability from put option		79			6,122			—
Others		6,466			12,815			14,368
		99,558			58,419			179,785
Other expenditures:
Asset impairment (b)		—			—			296,581
Civil repair to the Peruvian Government (c)		—			73,500			69,150
Legal litigation (class action) (Note 22)		—			—			49,754
Impairment of goodwill and trademarks (Note 17 a)		49,608			—			33,089
Net cost of fixed assets disposal		78,378			36,931			21,061
Others		4,441			9,323			36,904
		132,427			119,754			506,539
		(32,869	)		(61,335	)		(326,754	)

(a) Corresponds to the refinancing agreement linked to the contract signed between GyM Ferrrovias S.A. and Mitzuho Bank Ltd. where the Company acted as an endorsement of the transaction. Under the contract, a bond letter was issued with Mitzuho Bank Ltd. for it to be covered with a financial derivative. The contract further indicated that in the event that the bank refinanced the debt, the Company received 70% of the gains obtained.

(b) Mainly corresponds to a provision for impairment of accounts receivable from GSP for S/276 million (Note 15 a) and the subsidiary Promotora Larco Mar S.A. recognized an impairment on work in progress balances for S/18 million.

(c) The Company increased the provision for civil reparation in S/69 million (Note 22).

29 TAX SITUATION

a) Each company in the Group is individually subject to the applicable taxes in Peru, Chile and Colombia. Management considers that it has determined the taxable income under general income tax laws in accordance with the tax legislation current effective of each country.

b) Changes in the Income Tax Law in Colombia—

With the entry into force of the law 2010 of December 2019 law of economic growth, employment, investment, strengthening of public finances and the progressivity, equity and efficiency of the tax system, the following was stipulated as of January 1 2020:

It is supposed that the liquid income is not less than 3.5% of its liquid assets of the previous year. The percentage of presumptive income will be reduced to 0.5% by 2020 and 0% from 2021.

F-105

The income tax rate applicable to national societies, permanent establishments and foreign legal entities will be 32%, 31% and 30% for the periods 2020,2021 and 2022, respectively.

Individuals or corporation taxpayers who receive income from foreign sources subject to income in the country of origin, can deduct the tax paid abroad from this income.

Payments abroad for interest, commissions, fees, royalties, leases, personal services are subject to withholding tax at the rate of 20%. Payments for consulting, technical services and technical assistance provided by non-residents are subject to the 20% withholding tax rate. Payments for financial returns to non-residents are subject to the 15% withholding tax rate. Payments to the parent company for management fee, are subject to the 33% withholding tax rate.

Taxpayers may correct their tax returns within three (3) years after the closing date of tax submits and before they have been notified of a special requirement.

The statute of limitations for income taxpayers who compensate for tax losses or are subject to transfer prices will be five (5) years.

In case of an increase in taxable income of 30% with respect to the previous year, for fiscal years 2020 and 2021, the statute of limitation of the returns would be six (6) months and in the case of a 20% increase year will be close at month twelve (12).

c) The income tax expense shown in the consolidated statement of income comprises:

	2017			2018			2019
Current income tax		168,143			150,020			113,062
Deferred income tax (Note 24)		(44,550	)		(23,594	)		206,895
PPUA		613			—			—
		124,206			126,426			319,957
(-) Discontinued Operations		(77,901	)		(13,108	)		—
Income tax expense		46,305			113,318			319,957

F-106

d) The Group’s income tax differs from the theoretical amount that would have resulted from applying the weighted-average income tax rate applicable to the profit reported by of the consolidated companies, as follows:

	2017			2018			2019
Profit (loss) before income tax		45,112			133,948			(474,726	)
Income tax by applying local applicable tax rates on profit generated in the respective countries		13,811			40,507			(141,370	)
Tax effect on:
- Reversal of deferred income tax asset		—			—			174,716
- Non-recoverable item		—			—			85,301
- Non-deductible expenses		30,472			70,052			84,832
- Unrecognized deferred income tax asset		1,562			8,592			82,424
- Change in prior years estimations		9,005			3,235			36,529
- Provision of tax contingencies		—			—			7,079
- Adjustment for changes in rates of income tax		27			1,524			622
- PPUA adjustment for changes in tax rates		(611	)		—			—
- Non-taxable income		(4	)		(1,691	)		(1,195	)
- Equity method (profit) loss		394			(1,094	)		(64	)
- Others		(8,351	)		(7,807	)		(8,917	)
Income tax		46,305			113,318			319,957

e) The theoretical tax disclosed is the result of applying the income tax rate in accordance with the tax legislation of the country where each company that is part of the Group is domiciled. In this sense, companies domiciled in Peru, Chile, and Colombia applied in 2019 income tax rates of 29.5%, 27% and 33% respectively (29.5%, 27% and 37% for 2018). Norvial S.A., GyM Ferrovias S.A., Concesionaria Via Expresa Sur S.A. and GMP S.A. (Blocks III and IV) have legal stability contracts signed with the Peruvian Government in force during the term of the associated concessions. Therefore, the consolidated theoretical amount is obtained from the weighting of the profit or loss before income tax and the applicable income tax rate.

Country	Rates Taxes local Applicable			Utility before the Tax to Rent			Tax to rent
	(A)			(B)			(A)*(B)
2017
Perú		28.00	%		420,421			124,024
Perú – Norvial S.A.		27.00	%		68,104			18,388
Perú – GyM Ferrovías S.A.		30.00	%		29,028			8,708
Peru – Vía Expresa Sur S.A.		30.00	%		779			234
Perú – GMP S.A.		30.00	%		20,941			6,073
Chile		24.00	%		(93,031	)		(23,723	)
Colombia		40.00	%		(27,970	)		(11,188	)
Bolivia		25.00	%		(2,897	)		(724	)
Unrealized gains					(370,263	)		(107,981	)
Total					45,112			13,811

F-107

Country	Rates Taxes local Applicable			Utility before the Tax to Rent			Tax to rent
	(A)			(B)			(A)*(B)
2018
Peru		29.50	%		151,627			44,730
Peru – Norvial S.A.		27.00	%		21,104			5,698
Peru – GyM Ferrovías S.A.		30.00	%		125,136			37,541
Peru – Vía Expresa Sur S.A.		30.00	%		2,951			885
Peru – GMP S.A.		29.00	%		35,421			10,272
Chile		27.00	%		(20,768	)		(5,607	)
Colombia – Morelco S.A.		37.00	%		11,851			4,385
Colombia – GyM S.A. Branch		33.00	%		1,984			655
Bolivia		25.00	%		(137	)		(34	)
Unrealized gains					(195,221	)		(58,018	)
					133,948			40,507
2019
Peru		29.50	%		(1,612,192	)		(475,597	)
Peru – Norvial S.A.		27.00	%		24,066			6,498
Peru – GyM Ferrovías S.A.		30.00	%		121,080			36,324
Peru – Vía Expresa Sur S.A.		30.00	%		(17,752	)		(5,326	)
Peru – GMP S.A.		29.00	%		35,421			10,272
Chile		27.00	%		(36,917	)		(9,967	)
Colombia – GyM S.A. Branch		33.00	%		(11,824	)		(3,902	)
Bolivia		25.00	%		681			170
Unrealized gains					1,022,711			300,158
					(474,726	)		(141,370	)

In 2018, Colombia applied a 33% Income Tax rate and a 4% temporary surcharge on a taxable income greater than S/895 thousand (equivalent to COP800 million). The two subsidiaries domiciled in Colombia determined taxable income that generated the application of income tax rates of 37% and 33%.

f) Peruvian tax authorities have the right to examine, and, if necessary, amend the income tax determined by the Company in the last four years - from January 1 of the year after the date when the tax returns are filed (open fiscal year). Therefore, the years 2015 through 2019 are subject to examination by the tax authorities. Management considers that no significant liabilities will arise as a result of these possible tax examinations. Additionally, income tax returns for fiscal years 2017 to 2019 remain open for examination by the Chilean tax authorities who have the right to carry out said examination within the three years following the date the income tax returns had been filed. Fiscal years 2016 to 2019 are open for tax audit by Colombian tax authorities. Colombian tax authorities are entitled to audit two consecutive years following the date the income tax returns were filed.

g) In accordance with current legislation, for determination of income tax and general sales tax, the transfer prices transactions with related companies and companies resident in territories with low or no taxation must be considered. For this purpose, documentation and information must be available to support the valuation methods used and the criteria considered for their determination (transfer pricing rules). The Tax Administration is authorized to request this information from the taxpayer. Based on the analysis of the Company’s operations, Management and its legal advisors estimate that the transfer prices of transactions with related companies are based on market conditions, similar to those agreed with third parties, at 31 December 2019.

F-108

h) Temporary tax on net assets (ITAN)

The temporary tax on net assets is applied by the companies which operate in Peru, to third category income generators subject to the Peruvian Income Tax General Regime. Effective the year 2012, the tax rate is 0.4%, applicable to the amount of the net assets exceeding S/1 million.

The amount effectively paid may be used as a credit against payments on account of income tax or against the provisional tax payment of the income tax of the related period.

i) The recoverability of the deferred income tax asset registered in Negocios del Gas at the end of 2018, related to the impairment of investments in GSP has been evaluated, finally ending in a write-off of S/172 million.

j) In 2019, certain operations have not been recognized to have impact on income tax such as: additional impairment of investments in GSP (Negocios del Gas S.A.) S/67 million, impairment of accounts receivable in GyM S.A. amount to S/7.7 million and work in progress in Concesionaria Vía Expresa Sur S.A. and Promotora Larcomar S.A. equal to S/10.8 million.

k) The current income tax payable, after applying the corresponding tax credits and whose due date is up to the first week of April of the following year, includes mainly:

–	GyM Ferrovias S.A.	S/7 million in 2019 and S/20 million in 2018
–	Inmobiliaria Almonte S.A.	S/10 million in 2018

30 OTHER COMPREHENSIVE INCOME

The analysis of this account is reflected below:

	Cash flow hedge			Foreign currency translations adjustment			Increase in fair value of available-for sale assets		Exchange difference from net investment in a foreign operation			Total
At January 1, 2017		(87	)		(54,556	)		7,461		(8,455	)		(55,637	)
Credit (charge) for the year		650			(9,166	)		—		9,222			706
Tax effects		(192	)		—			—		(2,729	)		(2,921	)
Other comprehensive income of the year		458			(9,166	)		—		6,493			(2,215	)
At December 31, 2017		371			(63,722	)		7,461		(1,962	)		(57,852	)
(Charge) credit for the year		160			(7,875	)		—		(10,800	)		(18,515	)
Tax effects		(47	)		—			—		2,808			2,761
Transfer to profit or loss (*)		—			14,805			—		—			14,805
Other comprehensive income of the year		113			6,930			—		(7,992	)		(949	)
At December 31, 2018		484			(56,792	)		7,461		(9,954	)		(58,801	)
(Charge) credit for the year		8			(6,892	)		—		—			(6,884	)
Tax effects		(2	)		—			—		—			(2	)
Other comprehensive income of the year		6			(6,892	)		—		—			(6,886	)
At December 31, 2019		490			(63,684	)		7,461		(9,954	)		(65,687	)

(*) The amount of S/14.8 million corresponds to the recognition of the translation adjustment from CAM Chile S.A., an indirect subsidiary sold in December 2018.

F-109

The amounts in the above table only represent amounts attributable to the Company’s controlling interest, net of tax. The table below shows the movement in other comprehensive income per year:

	2017			2018			2019
Controlling interest		(2,215	)		(949	)		(6,886	)
Non-controlling interest		(3,117	)		(1,346	)		(1,734	)
Adjustment for actuarial gains and losses, net of tax		(2,948	)		16,589			—
Total value in OCI		(8,280	)		14,294			(8,620	)

31 CONTINGENCIES, COMMITMENTS, AND WARRANTIES

In the opinion of Management and its legal advisors, the provisions registered mainly for labor and tax claims are sufficient to cover the results of these probable contingencies. (Note 22).

a) Tax contingencies

The Company considers that the maximum exposure for tax contingencies of the Group amounts to S/71.4 million according to the following detail:

Contentious Administrative Process before the Judiciary regarding the assessment of IGV or VAT tax from 1998 to 2002 for S/0.6 million and for Income Tax and IGV or VAT tax from 2001 for S/3.3 million.

The appeal before SUNAT of income tax assessments from 2012 to 2016 amounting to S/48.5 million (S/37.5 million correspond to GyM SA, S/3.7 million to Viva GyM SA, S/6.1 million to GMI SA and S/1.2 million by Consorcio Río Mantaro).

The appeal before the Tax Court regarding VAT tax assessments for 2014 amounting to S/2.7 million (corresponding to the Consortium Constructor Ductos del Sur); income tax assessments from 2009 to 2013 equal to S/16.1 million (S/14.7 million for the Company, S/1.4 million for Viva GyM SA) and Non-domiciliated Income Tax for 2011 amounting to S/0.1 million corresponding to Viva GyM S.A.

Management believes that all the processes mentioned above will be favorable considering their characteristics and the evaluation of their legal advisors.

b) Other contingencies

Civil lawsuits, demanding compensation of damages, contract terminations and the enforcement of payment obligations S/17.1 million (S/0.3 million for GyM SA, S/15.4 million correspond to Consorcio Constructor Ductos del Sur., S/0.6 million to Consorcio Peruano de Conservacion, S/0.1 to Las Lomas SAC, S/0.5 million to Consorcio Rio Urubamba and S/0.1 million to Consorcio Vial Ayacucho)

Administrative contentious proceedings amounting to S/0.6 million in fines imposed by OSINERGMIN to GMP S.A.

Administrative processes amounting to S/2.5 million (S/1.08 million correspond to Viva GyM SA, S/0.2 million to Consorcio Toromocho, S/0.2 million to GMP SA, S/0.34 million to GMVBS SA, S/0.25 million to GyM SA, S/0.34 million to Inmobiliaria Almonte SAC and S/0.05 million to Terminales del Perú)

Labor dispute processes amounting to S/16.76 million (S/2.03 million correspond to Concar SA, S/1.52 million to Consorcio GyM - Conciviles, S/1 million to Consorcio Lima Commercial Activities, S/2.04 million to GMP SA, S/8.9 million to GyM SA, S/0.35 million to Morelco SA, S/0.30 million to Consorcio Rio Mantaro, S/0.15 million to Consorcio Tren electric, S/0.14 million to GyM International Operations SAC, S/0.03 million to Vial y Vives and S/0.3 million to Servisel SA).

F-110

c) Letters bonds and guarantees

The Group maintains letters of guarantee and guarantees in force in various financial institutions guaranteeing operations for US $ 376.1 million and US $ 13.9 million, respectively (US$471.6 million and US$13.9 million, respectively, as of December 31, 2018).

32 BUSINESS COMBINATIONS

a) Morelco S.A.S. acquisition

On December 23, 2014, the Company acquired control through its subsidiary GyM S.A., with the purchase of 70% of its shares representing the capital stock. Morelco S.A.S. is an entity domiciled in Colombia, whose principal economic activity is the provision of construction and assembly services. This acquisition forms part of the Group’s expansion plans in markets with high growth potential such as Colombia and in attractive industries such as mining and energy.

At December 31, 2014, the Company determined goodwill on this acquisition based on an estimated purchase price of US$93.7 million (equivalent to S/277.1 million) which included cash payments made of US$78.5 million (S/237.5 million, approximately) and estimated payables of US$15.1 million (equivalent to S/45.7 million), which according to what was agreed between the parties, would be defined after the review of the balance sheet of the acquired entity mainly referring to working capital, cash and financial debt and the determination of the definitive value of the contracted works pending to execute (backlog) of the acquired business. The estimated purchase price was distributed among the provisional fair values of the assets acquired, and liabilities assumed.

As a result of this distribution, a goodwill of US$36.1 million (equivalent to S/105.8 million) was determined.

Non-controlling interest put and call options

In accordance with the shareholders’ agreement entered into for the purchase of Morelco, the Company signed put and call option contract on 30% of the shares of Morelco held by the non-controlling shareholders. Through this contract, the non-controlling shareholders obtain a right to sell their shares within the term and amount established in the contract (put options). The period for exercising the option begins on completion of the second year of the purchase and expires in the tenth year. The exercise price is based on a multiple of EBITDA less net financial debt and until the months 51 and 63 from the date of the agreement, a minimum value is set based on the price per share that the Company paid to acquire 70% of Morelco shares.

The Company obtains the right to purchase the same shares for a period of 10 years and at a determined price similar to that of the aforementioned put options, except that the minimum value applies to the entire term of the option (call options).

Into IFRS framework, the put option represents an obligation for the Company to purchase shares of the non-controlling interest and, consequently, the Group recognizes a liability measured by the fair value of that option, as of December 31, 2019, the value of the liability amounts to S/106.4 million (as of December 31, 2018, it was S/103.7 million). Because the Group concluded that as a result of this contract, did not acquire the significant risks and rewards inherent to the stock option package, the initial recognition of this liability was charged to an equity account of the controlling stockholders, under the heading of other reserves (Note 21).

On April 30, 2019, an addenda No. 01 was signed to the shareholders Agreement, which modifies:

Section 7.3 sale option in favor of the Initial shareholder, for the following:

As of December 31, 2020 and for a term of six (6) months, the initial shareholder may exercise a selling option, only once, for a number of shares held by the Initial shareholder equivalent to sixty-six point sixty-seven percent (66.67%) of the shares held by the Initial shareholder at the time of exercising the Low

F-111

sale option this sub-clause (sale option 1). As of December 31, 2022 and for a term of six (6) months, the Initial shareholder may at any time exercise a sale option, for one time only, for the totality and not less than the totality of the shares held by the Initial shareholder at the time of exercising the sale option under this subclause, notwithstanding the foregoing, if GyM S.A. does not fulfill its obligations subject to the option of sale 1 within the period indicated in paragraph b of this Section 7.3, the term established for the exercise of option 2 is accelerated and may be exercised by the Initial shareholder at any time after the day following expiration of said period by sending a Notification of the option of sale to GyM S.A., so that in such event GyM S.A. will only fulfill its obligations by purchasing one hundred (100%) of the shares held by the previous shareholder.

Section 7.3 (c) is replaced in its entirety by the following:

(c) The price per share in each sale option shall be equal to the base price per share plus an interest charge. The base price per share shall be the result of dividing 5,375 times the EBITDA of the twelve (12) months prior to the date of receipt of the Notification of the option of sale by GyM S.A. minus DFN, between (and) all of the shares at the date of receipt of the Notice of option of sale by GyM S.A.; however, the corresponding base price per share shall not be less than the price per share corresponding to the purchase price [as that term is defined in the share sale Contract). The base price per Minimum action established in this Section 7.3 (c) shall not apply: (a) in a sale option that is triggered by the GyM S.A. share provision to a third party, when the GyM S.A. Stock provision does not result in a sale of the Company, and (b) in an Opt sales ion activated before an Exempt Operation. On the base price per share, remuneration interest will be caused at an annual interest rate composed of two point seventy percent (2.70%) as of (i) February 14, 2018 for option 1; (ii) December 31, 2019 for sale option 2 and (iii) in both cases, up to the effective payment date of the purchase contract price concluded as a result of the exercise of each sale option.

33 DIVIDENDS

In compliance with certain covenants, the company will not pay dividends for the years 2018 and 2019, except for transactions with non-controlling interests described in Note 35-d).

34 LOSS PER SHARE

The basic loss per common share has been calculated by dividing the loss of the year attributable to the Group’s common shareholders by the weighted average of the number of common shares outstanding during that year. No diluted loss per common share has been calculated because there is no potential diluent common or investment shares (ie, financial instruments or agreements that entitle to obtain common or investment shares); therefore, it is the same as the loss per basic share. The basic loss per common share is as follows:

F-112

		2017			2018			2019
Loss attributable to owners of the Company during the year			148,738			(83,188	)		(884,721	)
Weighted average number of shares in issue at S/1.00 each, at December 31,			660,053,790			665,835,490			822,213,119
Basic loss per share (in S/)	(*)		0.225			(0.125	)		(1.076	)
Loss from continuing operations attributable to owners of the Company during the year			(66,577	)		(65,888	)		(840,762	)
Weighted average number of shares in issue at S/1.00 each, at December 31,			660,053,790			665,835,490			822,213,119
Basic loss per share (S/)	(*)		(0.101	)		(0.099	)		(1.023	)

(*) The Group does not have common shares with dilutive effects at December 31, 2018 and 2019.

35 TRANSACTIONS WITH NON-CONTROLLING INTERESTS

a) Acquisition of additional non-controlling interest

In May, November and December 2016, GyM Chile S.p.A. acquired 5.43%, 6.77%, and 1.49%, respectively of additional shares in Vial y Vives - DSD S.A. at a total purchase price of S/21.6 million, S/25.7 million and S/3.8 million, respectively. The carrying values of the non-controlling interest at the acquisition dates were S/13.9 million, S/17.9 million and S/3.9 million. The Group ceased to recognize the corresponding non-controlling interest, recording a decrease in equity attributable to the owners of the Company of S/15.4 million. At December 31, 2019, the outstanding balance was S/22.7 million (S/23 million in 2018) (Note 21).

b) Contributions (returns) from non-controlling shareholders

Corresponds to the contributions and returns made by the partners of the subsidiary Viva GyM S.A. for the realization of real estate projects. As of December 31, the balances include:

	2017			2018			2019
Viva GyM S.A.
Contributions received		8,654			3,399			152
Returns of contributions		(45,053	)		(87,856	)		(33,148	)
		(36,399	)		(84,457	)		(32,996	)
Plus (less):
Contributions from other subsidiaries		3,202			15,120			—
Increase (decrease) in equity of non controlling parties		(33,197	)		(69,337	)		(32,996	)

F-113

36 DISCONTINUED OPERATIONS AND NON-CURRENT ASSET CLASSIFIED AS HELD FOR SALE

As part of the non-strategic asset divestment process initiated by the Company, in 2017, GMD S.A. was sold (“completed”), and in 2018, CAM Servicios del Peru S.A. and CAM Chile S.A., and Stracon GyM S.A. were sold (“completed”).

Additionally, information is presented on Adexus S.A., a subsidiary that has been reclassified as a non-current asset available for sale (“planned”) as of December 31, 2017, 2018 and 2019.

Below is the information on the financial result and cash flow from discontinued operations, GMD S.A., Stracon GyM S.A., CAM Servicios del Peru S.A., CAM Chile S.A. (done) and Adexus S.A. (planned):

	Discontinued operations
	At December 31,
	2017						2018						2019
	GMD Grupo CAM and Stracon GyM			Adexus S.A.			Grupo CAM and Stracon GyM			Adexus S.A.			Adexus S.A.
	(Completed)			(Planned)			(Completed)			(Planned)			(Planned)
Revenues		1,894,055			284,024			1,010,739			302,936			252,857
Operating costs		(1,751,317	)		(239,680	)		(968,375	)		(263,455	)		(244,183	)
Gross profit		142,738			44,344			42,364			39,481			8,674
Administrative expenses		(83,483	)		(32,761	)		(56,950	)		(32,730	)		(34,744	)
Other (expenses) income, net		13,279			(835	)		860			(4,519	)		(12,740	)
Gain from the sale of investments		21,554			—			—			—			—
Operating (loss) profit		94,088			10,748			(13,726	)		2,232			(38,810	)
Financial expenses		(27,398	)		(10,755	)		(19,971	)		(12,786	)		(24,359	)
Financial income		2,269			264			6,253			610			2,625
Share of the profit or loss in associates and joint ventures		854
Loss before income tax		69,813			257			(27,444	)		(9,944	)		(60,544	)
Income tax		(14,110	)		147			7,112			2,325			16,585
Loss from discontinued operations (a)		55,703			404			(20,332	)		(7,619	)		(43,959	)
Details of the sale of the subsidiary
Revenues from the sale of investments		269,961			—			310,855			—			—
Cost from the sale of investments		(51,697	)		—			(237,213	)		—			—
Income tax expense on gain		(63,940	)		—			(8,906	)		—			—
Gain on sale after income tax (b)		154,324			—			64,736			—			—
Net effect in consolidated (a) + (b)		210,027			404			44,404			(7,619	)		(43,959	)
Cash flows relating to the discontinued operations are as follows:
Operating cash flows		149,687			6,083			6,967			36,450			437
Investing cash flows		(10,377	)		(19,570	)		(11,474	)		(18,141	)		—
Financing cash flows		(136,165	)		14,059			526			(21,422	)		(1,250	)
Net increase generated in subsidiary		3,145			572			(3,981	)		(3,113	)		(813	)

A. Discontinued operations

i) CAM Servicios del Peru S.A. and CAM Chile S.A.

On December 4, 2018, the Company entered into a purchase and sale agreement for all of its shares (representing 73.16%) of CAM Servicios del Peru S.A. and CAM Chile S.A. The Group received for its participation in CAM Chile S.A. and CAM Servicios del Peru S.A. the sum of (i) US$15.78 million (equivalent to S/51.7 million) for the shares of CAM Chile S.A. and (ii) US$3.0 million (equivalent to S/10.4 million) for the shares of CAM Servicios del Peru S.A., respectively. The net gain on the sale of both subsidiaries amounted to S/31.7 million.

ii) Stracon GyM S.A.

On March 28, 2018, the Company entered into a purchase and sale agreement for all of its shares (representing 87.59%) in Stracon GyM S.A. The sale price was agreed in US$76.8 million (equivalent to S/248.8 million), which is fully paid. The net gain on the sale amounted to S/41.9 million.

F-114

iii) GMD S.A.

On June 6, 2017, the Company entered into a sales contract for all of its shares (representing 89.19%) in GMD S.A. The sales price was agreed at US$84.7 million (equivalent to S/269.9 million), which is fully paid. The net gain on the sale amounted to S/218.3 million (US$64.6 million approximately).

B. Non-current asset classified as held for sale

At December 31, 2018 and 2019, non-current assets and liabilities held for sale correspond to investments in the company Adexus S.A. (hereinafter Adexus), whose main activity is to provide information technology solutions mainly in Chile and Peru.

On November 19, 2019, Adexus S.A. filed an application for reorganization under Law 20.720 with the Chilean courts of justice. The Company impaired the total investment value as of December 31, 2019.

The reorganization allows companies with temporary liquidity problems to obtain financial protection for a period of 30 days, extendable for a period of 60 days, with the support of their creditors, to prepare, propose and negotiate a plan to restructure their assets and liabilities.

Although the Company investment in Adexus has been declared as an available-for-sale investment and on an exceptional basis, the Group decided that Adexus will be subject to the patrimonial protection law; after achieving this restructuring, the Group will focus on honoring it in the terms agreed while finding the right shareholder for the future development of the Company.

	At December 31,
	2018		2019
ASSETS
Cash and cash equivalets		6,074		1,723
Accounts receivables, net		157,351		129,739
Inventories, net		3,999		2,828
Other assets, net		80,374		68,730
Total assets		247,798		203,020
LIABILITIES
Borrowings		71,810		91,529
Accounts payable		148,817		118,497
Deferred income tax liabilities		5,201		—
Total liabilities		225,828		210,026
Total net assets		21,970		(7,006	)

As of December 31, 2017, this item includes Red Eagle Mining Corporation investment representing 6.18% of shares. In January and March 2018, the Company sold the total of its shares. The sale price was agreed at US$3.99 million (equivalent to S/16.24 million), which were paid in full.

37 EVENTS AFTER THE DATE OF THE STATEMENT OF FINANCIAL POSITION

1. On January 9, 2020, the Company communicated that the creditors committee of Adexus S.A. approved with the favorable vote of more than 80% of the pledge creditors and 85% of the unsecured creditors, respectively, the judicial reorganization agreement proposed by Adexus S.A. in the framework of the reorganization procedure. According to the terms of the judicial reorganization agreement, Adexus S.A. will restructure and pay the total of its reorganized liabilities within a maximum period of six years, according to the new agreed conditions, being authorized to continue with its commercial activities normally. As a result of the financial protection provided by the Chilean law and with the support of its creditors, Adexus S.A. has achieved the restructuring of its liabilities while continuing to serve all its customers.

F-115

2. On February 3, 2020, the General Shareholders Meeting of the Company approved the decision to enter into the Preliminary Agreement and the withdrawal and dismissal of the Request for Arbitration filed by the Company pursuant to the Preliminary Agreement. In addition, the ratification of the Act of Mutual Understanding for the Completion of Plea Agreement Procedure with the Peruvian Third Bureau of the Supraprovincial Corporate Prosecutor’s Office Specialized in Crimes of Corruption of Officials – Special Team and the Ad Hoc Peruvian National State Counsel.

3. The recent outbreak of the Novel Coronavirus 2019 (COVID-19) pandemic, which has been declared by the World Health Organization to be a “public health emergency of international concern,” has spread across the world since the end of 2019. Countries around the world—including Peru as well as Chile and Colombia—have adopted extraordinary measures to contain the spread of COVID-19, including imposing travel restrictions, requiring closures of non-essential businesses, establishing restrictions on public gatherings, instructing residents to practice social distancing, issuing stay-at-home orders, implementing quarantines and similar actions. In response to the sudden decline in economic activity, the governments of Perú, Chile and Colombia have announced large stimulus programs to assist families and businesses.

As a result, the Group’s results of operations, financial positions and cash flows have been adversely affected as of the date of this report with potential impacts on subsequent periods, including but not limited to the significant decline in revenue and significant operating cash flow. The impacts may also include additional allowance for doubtful accounts and impairment to the Group’s long-term assets. Because of the significant uncertainties surrounding the COVID-19, the exact financial impact is unpredictable and will depend on future developments, including new information which may emerge concerning the duration of the state of emergency which has been extended until June 30th for Perú, September 18th for Chile and until August 31st for Colombia, the actions taken by authorities and other entities to contain the COVID-19 outbreak, among others, all of which are beyond the Group’s control. The Group will continue to closely monitor the impacts of COVID-19 through the course of the year 2020.

Since mid-March 2020, substantially all of our engineering and construction and real estate projects were mandatorily shut down, however, as part of the Government plan to activate some industries according to progressive stages, most of our projects are in the process of re-activating operations gradually. Our infrastructure operations, were declared essential businesses, therefore have continue operating; however, certain of our infrastructure businesses have been adversely affected, in particular, by the sharp decline in traffic volumes and oil and gas prices (also due to the dispute in March among OPEC member countries).

In response to this situation, the Group has implemented a plan that includes several measures to reduce expenses and preserve cash in response to the ongoing COVID-19 pandemic, including the following: (i) developing a 12-week cash plan, project-by-project, to ensure that the Company will continue to meet its critical obligations during that period, which plan is monitored and updated weekly; (ii) preparing a cash plan for the remainder of the 2020 fiscal year, to identify in advance key liquidity issues that may arise; (iii) identifying and renegotiating certain of the company’s obligations with respect to its suppliers, banks and other third parties; (iv) identifying and reducing non-essential general expenses across the group; (v) reducing headcount, and temporarily reducing salaries of senior management, across the company’s three segments; and (vi) reducing capital expenditures across the company’s subsidiaries. In addition, the Group is evaluating the selling of minor assets to finance any cash flow deficit during the year. This plan was approved by the board of directors on April and May 2020. Therefore, the accompanying financial statements have been prepared assuming that the group and subsidiaries will continue as a going concern.

The consolidated financial statements have been prepared based on the existing conditions as of December 31, 2019, and considering those events that occurred after that date, and no adjustments needed to be recorded to the consolidated financial statements as of December 31, 2019 due to the COVID-19 impacts.

F-116

Supplementary Data (Unaudited)

Oil and Gas Producing Activities

In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 932, “Extractive Activities-Oil and Gas,” and regulations of the U.S. Securities and Exchange Commission (SEC), our company has included certain supplemental disclosures about its oil and gas exploration and production operations.

All information in the following supplemental disclosures related to Blocks I, III, IV and V. Information with respect to Blocks III and IV has been included from April 5, 2015, when our company began operating these blocks.

A.    Reserve Quantity Information

Graña y Montero Petrolera S.A. net proved reserves in the fields in which they operate and changes in those reserves for operations are disclosed below. The net proved reserves represent our company’s best estimate of proved oil and natural gas reserves. For 2018 and 2019, reserve estimates have been evaluated by its technical staff (reservoir engineers and geoscience professionals) and submitted to its Reserve Development Committee. The estimates for all years presented conform to the definitions found in FASB ASC paragraph 932-10-65-1 and Rule 4-10(a) of Regulation S-X.

Proved oil reserves are those quantities of oil, which, by analysis of geosciences and engineering data, can be estimated with reasonable certainty to be economically producible, based on prices used to estimate reserves, from a given date forward from known reservoirs, and under existing economic conditions, operating methods, and government regulation prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain.

The term “reasonable certainty” implies a high degree of confidence that the quantities of oil actually recovered will equal or exceed the estimate. To achieve reasonable certainty, our company’s engineers and independent petroleum consultants relied on technologies that have been demonstrated to yield results with consistency and repeatability. The technologies and economic data used to estimate our company’s proved reserves include, but are not limited to, well logs, geologic maps, seismic data, well test data, production data, historical price and cost information and property ownership interests.

PROVED RESERVES ⁽¹⁾

	Total						Peru
	Oil (MBBL)			Gas (MMcf)			Oil (MBBL)			Gas (MMcf)
Proved developed and undeveloped reserves, December 31, 2017		26,496			9,354			26,496			9,354
Revisions of previous estimates		2,332			26,481			2,332			26,481
Enhanced oil recovery		—			—			—			—
Purchases		—			—			—			—
Production(a)		(1,334	)		(2,229	)		(1,334	)		(2,229	)
Sales in place		0			0			0			0
Proved developed and undeveloped reserves, December 31, 2018(2)(3)		27,494			33,606			27,494			33,606
Revisions of previous estimates(4)		2,660			(4,365	)		2,660			(4,365	)
Enhanced oil recovery		—			—			—			—
Purchases		—			—			—			—
Production		(1,486	)		(1,771	)		(1,486	)		(1,771	)
Sales in place		—			—			—			—
Proved developed and undeveloped reserves, December 31, 2019		28,668			27,470			28,668			27,470

(1) Proved reserves estimated in oil and gas properties located in Blocks I, III, IV and V (Talara and Paita) under two service contracts and two license contracts with Perupetro. The rights to produce hydrocarbons expire in December 2021 for Block I, April 2045 for Blocks III and IV, and October 2023 for Block V. The proved reserves estimated in this report constitute all of the proved reserves under contracts by Graña y Montero Petrolera S.A.

S-1

(2) The revisions in reserve estimates are based on new information obtained as a result of drilling activities and workovers. During 2018 and 2019, proved developed reserves of crude oil increased due to drilling activities in Block IV

(3) As of December 31, 2018, the associated gas reserves were 33,606 MMCF. As of December 31, 2019, the associated gas reserves were 27,460 MMCF.

(4) Gas reserves as of December 31, 2019 were lower than gas reserves as of December 31, 2018 due to gas production in 2019 (4,518 MMcf) and the revision of the previous estimate in Block IV (1.618 MMCF).

RESERVE QUANTITY INFORMATION

FOR THE YEAR ENDED DECEMBER 31, 2017

	Total				Peru
	Oil (MBBL)		Gas (MMCF)		Oil (MBBL)		Gas (MMCF)
Proved developed reserves
Beginning of year		8,521		10,521		8,521		10,521
End of year		8,664		9,354		8,663		9,354
Proved undeveloped reserves
Beginning of year		16,670		—		16,670		—
End of year		17,833		—		17,833		—

RESERVE QUANTITY INFORMATION

FOR THE YEAR ENDED DECEMBER 31, 2018

	Total				Peru
	Oil (MBBL)		Gas (MMCF)		Oil (MBBL)		Gas (MMCF)
Proved developed reserves
Beginning of year		8,664		9,354		8,664		9,354
End of year		9,912		19,839		9,912		19,839
Proved undeveloped reserves
Beginning of year		17,833		—		17,833		—
End of year		17,582		13,767		17,582		13,767

RESERVE QUANTITY INFORMATION

FOR THE YEAR ENDED DECEMBER 31, 2019

	Total				Peru
	Oil (MBBL)		Gas (MMCF)		Oil (MBBL)		Gas (MMCF)
Proved developed reserves
Beginning of year		9,912		13,767		9,912		9,354
End of year		10,366		14,881		10,366		14,881
Proved undeveloped reserves
Beginning of year		17,582		13,767		17,582		13,767
End of year		18,301		12,589		18,301		12,589

B. Capitalized Costs Relating to Oil and Gas Producing Activities

The following table sets forth the capitalized costs relating to our company’s crude oil and natural gas producing activities for the years indicated:

	2015			2016			2017			2018			2019
	(in US$ thousands)
Proved properties
Concessions
Mineral property, wells and related equipment		54,582			39,069			84,960			99,129			131,752
Drilling and Works in progress and Replacement Units		5,682			6,188			10,767			11,920			4,895
Total Proved Properties		60,264			45,257			95,727			111,049			136,647
Unproved properties		—			—			—			—			—
Total Property, Plant and Equipment		60,264			45,257			95,727			111,049			136,647
Accumulated depreciation, depletion, and amortization, and valuation allowances		(17,875	)		(17,774	)		(36,672	)		(45,426	)		(59,553	)
Net capitalized costs		42,389			27,482			59,054			65,624			77,093

S-2

C. Costs Incurred in Oil and Natural Gas Property Acquisition, Exploration and Development Activities

The following table sets forth costs incurred related to our company’s oil and natural gas activities for the years indicated:

	2015			2016			2017			2018			2019
	(in US$ thousands)
Acquisition costs of properties(1)
Proved		—			—			—			—			—
Unproved		—			—			—			—			—
Total acquisition costs
Exploration costs		—			—			—			(1,121	)		—
Development costs		(17,179	)		(19,161	)		(22,905	)		(25,192	)		(44,612	)
Total		(17,179	)		(19,161	)		(22,905	)		(26,313	)		(44,612	)

(1) Our company has not incurred in any cost related to Oil and Gas property acquisition for all years presented.

D. Results of Operations for Oil and Natural Gas Producing Activities

The results of operations for oil and natural gas producing activities, excluding overhead costs and interest expenses, are as follows for the years indicated:

	Total Peru
	2015			2016			2017			2018			2019
	(in US$ thousands)
Revenues
Additional Revenues of Gas Extraction Services		57,938			50,556			67,049			96,543			100,042
Total Revenues(1)		57,938			50,556			67,949			96,543			100,042
Production Costs		(25,976	)		(24,645	)		(28,097	)		(31,431	)		(32,741	)
Costs of Labor		(1,660	)		(1,767	)		(2,008	)		(2,099	)		(2,571	)
Repairs and Maintenance		(1,828	)		(1,563	)		(2,076	)		(2,421	)		(3,343	)
Materials, supplies and fuel consumed and supplies utilized		10,775	)		(9,540	)		(20,253	)		(9,704	)		(8,373	)
External services, insurances, security and others		(6,938	)		(6,388	)		(6,634	)		(7,979	)		(9,684	)
Operation office and staff expenses		(4,776	)		(5,388	)		(7,126	)		(9,228	)		(8,771	)
Additional Natural Gas supply costs after price adjustment Royalties		(7,982	)		(7,402	)		(15,016	)		(30,892	)		(31,508	)
DD&A Expenses		(16,931	)		(17,223	)		(19,851	)		(17,690	)		(19,417	)
Income (loss) before income taxes		7,048			1,286			4,984			16,530			16,376
Income tax expense(2)		(1,974	)		(373	)		(1,470	)		(4,876	)		(4,831	)
Results of operations from producing activities		5,075			913			3,514			11,654			11,545

(1) Income after deductions for Graña y Montero Petrolera S.A.’s share of government royalties according to contract obligations. There are no sales or transfers to our company’s other operations.

(2) In 2015, the legal tax rate was 28%, and during 2016, the legal tax rate was 27%. In 2017, the Peruvian government increased the legal tax rate to 29.5%. In 2018, the Peruvian government retained the legal tax rate at 29.5%. In 2019, the legal tax rate was 30.25%.

E. Standardized Measure of Discounted Future Net Cash Flows

The standardized measure of discounted future net cash flows, related to the proved reserves is based on estimates of net proved reserves and the period during which they are expected to be produced. Future cash inflows are computed by applying the twelve month period unweighted arithmetic average of the price as of the first day of each month within that twelve month period, unless prices are defined by contractual arrangements, after royalty share of estimated annual future production from proved oil and gas reserves.

S-3

Future production and development costs to be incurred in producing and further developing the proved reserves are based on year end cost indicators. Future income taxes are computed by applying year end statutory tax rates.

The following chart shows standardized measures of discounted future net cash flows for the periods indicated:

	2015			2016			2017			2018			2019
	(in US$ thousands)
Future Cash inflows		1,461,565			1,106,849			1,436101			2,041,128			1,836,895
Future production costs		(507,212	)		(285,608	)		(776,847	)		(1,446,949	)		(1,311,758	)
Future development costs		(368,873	)		(463,224	)		(221,557	)		(232,432	)		(338,141	)
Future production and development costs		(876,085	)		(748,832	)		(998,404	)		(1,679,381	)		(1,649,899	)
Future income tax expenses		(153,178	)		(105,615	)		(129,121	)		(106,715	)		(52,800	)
Future Net cash flows		432,301			252,402			308,577			255,031			134,196
10% annual discount for estimates timing of cash flows		(209,039	)		(115,028	)		(168,224	)		(115,518	)		(62,683	)
Standardized measure of discounted Future Net Cash Flows		223,262			137,374			140,353			139,514			71,512

(1) For oil volumes, per barrel prices after deductions of Graña y Montero Petrolera S.A.’s share government royalties used in determining future cash inflows for the years ended December 31, 2015, 2016, 2017, 2018 and 2019 were US$45.59, US$38.54, US$49.82, US$64.72 and US$61.19 respectively. For gas volumes, gas price is linked to the oil price according to the gas purchase contract.

(2) Production costs and developments costs relating to future production of proved reserves are based on the continuation of existing economic conditions. Future estimated decommissioning costs are included.

(3) Taxation is computed using the appropriate year-end statutory corporate income tax rates.

(4) Future net cash flows from oil production are discounted at 10% regardless of assessment of the risk associated with its production activities.

F. Changes in Standardized Measure of Discounted Future Net Cash Flows

The following chart shows changes in standardized measures of discounted future net cash flows for the periods indicated:

	2015			2016			2017			2018			2019
	(in US$ thousands)
Standardized measure of discounted Future Net Cash Flows, beginning of the year		74,668			223,262			137,374			140,353			139,514
Revenue less production and other costs		(103,058	)		(75,202	)		(96,045	)		(127,974	)		(132,783	)
Net changes in future development costs		(185,387	)		(53,464	)		94,388			(6,204	)		(53,324	)
Changes in price, net of production costs		(284,832	)		560			(109,168	)		(68,095	)		(55,359	)
Development cost incurred		17,179			19,161			22,905			29,218			44,612
Revisions of previous quantity estimates		674,418			(54,052	)		27,456			72,852			9,882
Accretion of discount		67,666			55,438			70,152			99,822			87,508
Net change in income taxes		(53,715	)		21,327			(85	)		427			30,250
Timing difference and other		(16,330	)		(343	)		(6,623	)		(886	)		1,213
Standardized measure of discounted Future Net Cash Flows, end of the year		223,262			137,374			140,353			139,514			71,512

S-4

EXHIBIT INDEX

Exhibit Number	Description
1.01*	By-Laws of the Registrant, as currently in effect
2.01**	Registrant’s Form of American Depositary Receipt
2.02**	Deposit Agreement, dated as of December  31, 2018, among the Registrant, The Bank of New York Mellon, as depositary, and all owners and holders from time to time of American depositary shares issued thereunder
8.01	Subsidiaries of the Registrant
10.01	Credit Agreement, dated as of July  31, 2019, by and between Graña y Montero, as borrower, and CS Peru Infrastructure Holdings LLC, as initial lender.
10.01.1	Amendment, Waiver and Consent, dated as of February  28, 2020, by and between Graña y Montero, as borrower, and CS Peru Infrastructure Holdings LLC, as initial lender.
10.02***	English translation of Financial Stability Framework Agreement, dated as of July  31, 2017, by and among, inter alia, Graña y Montero, as borrower, and Scotiabank Perú S.A.A., Banco Internacional del Perú S.A.A., BBVA Banco Continental, Banco de Crédito del Perú, Citibank del Perú S.A. and Citibank, N.A., as lenders.
10.03***	English translation of Section 20 of Concession Agreement, dated as of July  22, 2014, by and among the Peruvian Ministry of Energy and Mines, as contracting authority and the concessionaire party thereto.
10.04***	English translation of Memorandum of Understanding, dated as of September  26, 2017, by and among Graña y Montero, Negocios de Gas S.A., Enagás S.A., Odebrecht S.A., and Inversiones en Infraestructura de Transporte por Ductos S.A.C.
10.04.1***	English translation of Rights Subordination Agreement, dated as of April  29, 2016, by and among Odebrecht Latinvest Peru Ductos, S.A., Odebrecht S.A., Enagás, S.A., Graña y Montero, Negocios de Gas S.A., Inversiones en Infraestructura de Transporte por Ductos S.A.C., and Gasoducto Sur Peruano S.A.
10.04.1.1***	English translation of Addendum No. 1, dated as of June  24, 2016, to the Rights Subordination Agreement, dated as of April  29, 2016, by and among, inter alia, Odebrecht Latinvest Peru Ductos, S.A., Odebrecht S.A., Enagás, S.A., Graña y Montero, GyM S.A., Negocios de Gas S.A., Inversiones en Infraestructura de Transporte por Ductos S.A.C., Gasoducto Sur Peruano S.A., Odebrecht Perú Ingeniería y Construcción S.A.C., and Constructora Norberto Odebrecht S.A., Sucursal del Perú.
10.04.1.2***	English translation of Addendum No.  2 and Assignment Agreement, dated as of August 11, 2016, to the Rights Subordination Agreement, dated as of April  29, 2016, by and among, inter alia, Odebrecht Latinvest Peru Ductos, S.A., Odebrecht S.A., Enagás, S.A., Graña y Montero, GyM S.A., Negocios de Gas S.A., Inversiones en Infraestructura de Transporte por Ductos S.A.C., Gasoducto Sur Peruano S.A., Odebrecht Perú Ingeniería y Construcción S.A.C., and Constructora Norberto Odebrecht S.A., Sucursal del Perú.
10.04.1.3***	English translation of Modification to Addendum No.  2 and Assignment Agreement, dated as of October 25, 2016, to the Rights Subordination Agreement, dated as of April  29, 2016, by and among, inter alia, Odebrecht Latinvest Peru Ductos, S.A., Odebrecht S.A., Enagás, S.A., Graña y Montero, GyM S.A., Negocios de Gas S.A., Inversiones en Infraestructura de Transporte por Ductos S.A.C., Gasoducto Sur Peruano S.A., Odebrecht Perú Ingeniería y Construcción S.A.C., and Constructora Norberto Odebrecht S.A., Sucursal del Perú.
10.05	Description of Securities Registered Pursuant to Section 12 of the Exchange Act
12.01	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
12.02	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
13.01****	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
13.02****	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
101. INS	XBRL Instance Document
101. SCH	XBRL Taxonomy Extension Schema Document

1

Exhibit Number	Description
101. CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101. DEF	XBRL Taxonomy Extension Definition Linkbase Document
101. LAB	XBRL Taxonomy Extension Label Linkbase Document
101. PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Incorporated herein by reference to exhibit 1.01 of the Registrant’s Form 20-F (File No. 333-172855) filed with the SEC on April 30, 2014.

** Incorporated herein by reference to exhibit 1 to the Registrant’s registration statement on Form F-6 (File No. 333-228727) filed with the SEC on December 10, 2018.

*** Incorporated herein by reference to the Registrant’s Form 20-F (File No. 333-172855) filed with the SEC on May 15, 2018.

**** This certification will not be deemed “filed” for purposes of Section 18 of the Exchange Act (15 U.S.C. §78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.

2

EX-8.01

Exhibit 8.01

Subsidiaries of the Registrant

Subsidiary	Jurisdiction of Incorporation	Name Under Which the Subsidiary Does Business	Ownership Interest
Viva GyM S.A.	Peru	Viva GyM	Graña y Montero owns 99.54%; GyM owns 43.32%
GyM S.A.	Peru	GyM	Graña y Montero owns 98.87%
Concesionaria La Chira S.A.	Peru	La Chira	Graña y Montero owns 50.0%
Concesión Canchaque S.A.	Peru	Canchaque	Graña y Montero owns 99.96%
Concar S.A.	Peru	Concar	Graña y Montero owns 100%
GMP S.A.	Peru	GMP	Graña y Montero owns 95.0%
GyM Ferrovías S.A.	Peru	GyM Ferrovías	Graña y Montero owns 75.0%
Norvial S.A.*	Peru	Norvial	Graña y Montero owns 67.0%
Survial S.A.	Peru	Survial	Graña y Montero owns 99.99%
CAM Holding SPA	Peru	CAM Holding	Graña y Montero owns 100%
GMI S.A. Ingenieros Consultores	Peru	GMI	Graña y Montero owns 89.4%
ECOTEC S.A.C.	Peru	ECOTEC	GMI owns 99.99%
Construyendo País	Peru	Construyendo País	GyM owns 99.99%
Vial y Vives – DSD S.A.	Chile	Vial y Vives	GyM owns 94.49%
Inmobiliaria Almonte S.A.C.	Peru	Almonte	Viva GyM owns 50.45%
Inmobiliaria Pezet 417 S.A.C.	Peru	Pezet 417	Viva GyM owns 99.90%
Las Lomas S.A.C.	Peru	Las Lomas	Viva GyM owns 99.99%
Proyectos Inmobiliarios Consultores S.A.	Perú	PICSA	Viva GyM owns 92.42%
Morelco S.A.S	Colombia	Morelco	GyM owns 70.00%
Concesionaria Vía Expresa Sur S.A.	Peru	VESUR	Graña y Montero owns 99.98%; GyM owns the remaining 0.02%
Agenera S.A.C.	Perú	Agenera	Graña y Montero owns 99.00%; GyM owns the remaining 1.00%.
GyM Colombia S.A.S.	Colombia	GyM Colombia	Graña y Montero owns 66.20%, GyM owns the remaining 33.80%
Negocios de Gas S.A.	Peru	Negocios de Gas	Graña y Montero owns 99.99%; GyM owns the remaining 0.01%.
Qualys S.A. (Previously Generadora Arabesco S.A.)	Perú	Qualys	Graña y Montero owns 100.00%,
Adexus S.A. **	Chile	Adexus	Graña y Montero owns 100.00%,
Recaudo Lima S.A.	Perú	Recaudo Lima	Graña y Montero owns 70.00%, GMD owns the remaining 30.00%
Promotora Larco Mar S.A.	Perú	Promotora Larco Mar	Graña y Montero owns 46.55%
TGNCA S.A.	Perú	TGNCA	Graña y Montero owns 99.93%
Billetera Electrónica de Transporte Lima S.A.C.	Perú	BETL	Graña y Montero owns 95.5%
GyM Chile SPA	Chile	GyM Chile SPA	GyM owns 100%
Gestión de Soluciones Digitales S.A.C.	Perú	GSD	Graña y Montero owns 100%
Larcomar S.A.	Perú	Larcomar	Graña y Montero owns 79.66%
Promotores Asociados de Inmobiliaria S.A.	Perú	Promotores Asociados de Inmobiliaria	Graña y Montero owns 99.99%
Oiltanking Andina Services S.A.	Perú	OTAS	GMP owns 50.00%

* In June 2018, the company assigned economic rights over 48.8% of the share capital of Norvial to Inversiones en Autopistas S.A. by transferring its Class B shares of Norvial. The company continues to possess 67% of the voting rights of Norvial and an economic interest of 18.2% of Norvial’s share capital. JJC Contratistas Generales S.A. owns 16.8% of Norvial’s shares, and Inversiones en Infraestructura S.A owns the remaining 16.2%.

** In June 2018, Graña y Montero consolidated 100% of Adexus S.A. Graña y Montero is in the process of marketing Adexus S.A. for sale.

EX-10.01

Exhibit 10.01

EXECUTION VERSION

LOAN AGREEMENT

between

GRAÑA Y MONTERO S.A.A.,

as Borrower,

and

CS PERU INFRASTRUCTURE HOLDINGS LLC,

as Initial Lender,

Dated as of July 31, 2019

TABLE OF CONTENTS

		Page
SECTION 1.	Definitions and Accounting Terms		1
1.01	Defined Terms		1
1.02	Other Definitional Provisions		26
SECTION 2.	Amount and Terms of Credit		27
2.01	The Commitments		27
2.02	Notice of Borrowing		27
2.03	Disbursement of Funds		28
2.04	Notes		28
2.05	Pro Rata Borrowings		30
2.06	Interest		30
2.07	Increased Costs, Illegality, Etc.		31
2.08	Change of Applicable Lending Office		32
SECTION 3.	Fees; Reductions of Commitment		33
3.01	Fees		33
3.02	Mandatory Termination of the Commitment		33
SECTION 4.	Prepayments; Payments; Taxes		33
4.01	Voluntary Prepayments		33
4.02	Mandatory Repayments		34
4.03	Method and Place of Payment		35
4.04	Taxes		37
SECTION 5.	Conditions Precedent to the Borrowing of the Loans on the Closing Date		39
5.01	Credit Documents		39
5.02	Security Interests; Lien Searches		39
5.03	Opinions of Counsel; Solvency Certificate; Closing Date Certificate;
	Insurance; Authorization and Authority		40
5.04	Financial Statements		40
5.05	Fees and Expenses		40
5.06	Representations and Warranties		41
5.07	Process Agent Letter		41
5.08	Notice of Borrowing		41
5.09	Know Your Customer		41
5.10	No Default		41
5.11	Consents		41
5.12	No Material Adverse Effect		41
5.13	Lender Account		41
5.14	No Indebtedness		41
5.15	No Liens		42

i

TABLE OF CONTENTS (continued)

		Page
5.16	Maximum Leverage Ratio		42
5.17	Effectiveness of the Local Facility		42
SECTION 6.	Representations, Warranties and Agreements		42
6.01	Organization		42
6.02	Authority		42
6.03	Due Authorization, Etc.		42
6.04	Compliance with Law		43
6.05	No Litigation		43
6.06	Title		43
6.07	No Material Adverse Effect		43
6.08	Governmental Approvals		43
6.09	Insurance		44
6.10	Financial Condition		44
6.11	Subsidiaries.		44
6.12	Taxes		44
6.13	No Default		44
6.14	ERISA		44
6.15	No Violation		44
6.16	Security.		45
6.17	Investment Company Act		45
6.18	Pari Passu Ranking		45
6.19	Intellectual Property		45
6.20	Accuracy of Disclosure		46
6.21	Margin Regulations		46
6.22	Labor Relations		46
6.23	Environmental Matters		46
6.24	OFAC		46
6.25	Anti-Corruption Laws, Sanctions, and Anti-Money Laundering Laws		47
6.26	Use of Proceeds		47
6.27	Solvency		47
6.28	Transactions with Affiliates		47
SECTION 7.	Affirmative Covenants		47
7.01	Financial Statements; Financial Certifications and Other Information		47
7.02	Notices of Material Events		49
7.03	Books and Records; Inspection of Property		51
7.04	Maintenance of Property		52
7.05	Maintenance of Company Separateness		52
7.06	Governmental Approvals		52
7.07	Intellectual Property		52
7.08	Compliance with Laws		52

ii

TABLE OF CONTENTS (continued)

		Page
7.09	Maintenance of Legal Status		52
7.10	Insurance		52
7.11	Taxes		53
7.12	Preservation of Security Interests		53
7.13	Ownership of Subsidiaries		53
7.14	Auditors		53
7.15	Use of Proceeds		53
7.16	Environmental Matters		54
7.17	Dividend Collection Account; Paying Dividends		54
7.18	Sale or Other Disposition of Adexus		55
7.19	Ranking		55
7.20	Post-Closing Covenant		55
SECTION 8.	Negative Covenants		56
8.01	Prohibition of Fundamental Changes; Purchase and Sale of Assets, Etc.		56
8.02	Indebtedness		57
8.03	Liens		59
8.04	Investments		59
8.05	Distributions		59
8.06	Transactions with Affiliates		59
8.07	Constitutive Documents		60
8.08	Name; Fiscal Year		60
8.09	Anti-Terrorism and Anti-Money Laundering Laws; Anti-Corruption Laws		60
8.10	Financial Covenants		60
8.11	Principal Place of Business		61
8.12	Conduct of Business		61
8.13	Derivative Transactions.		61
8.14	Restrictive Agreements.		61
8.15	Amendments to Trust Agreement, Irrevocable Instruction Letters and Notifications		61
SECTION 9.	Events of Default		61
9.01	Payments of Principal of the Loans		61
9.02	Payments of Interest on the Loans.		61
9.03	Payments of Fees or Other Amounts		61
9.04	Certain Covenants		62
9.05	Other Covenants		62
9.06	Insurance Covenant		62
9.07	Representation and Warranties		62
9.08	Credit Documents		62
9.09	Bankruptcy, Etc.		62
9.10	Judgments		63

iii

TABLE OF CONTENTS (continued)

		Page
9.11	Security Documents; Irrevocable Instruction Letters; Notifications		63
9.12	Governmental Approvals		63
9.13	Condemnation; Suspension of Payments or Moratorium		63
9.14	Default under Other Agreements		64
SECTION 10.	Miscellaneous		64
10.01	Payment of Expenses, Etc.		64
10.02	Right of Setoff		66
10.03	Notices		66
10.04	Benefit of Agreement; Assignments; Participations		67
10.05	No Waiver; Remedies Cumulative		70
10.06	Payments Pro Rata		71
10.07	Calculations; Computations		71
10.08	GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL		71
10.09	Counterparts		74
10.10	Effectiveness; Integration		74
10.11	Headings Descriptive		74
10.12	Amendment or Waiver; Etc.		74
10.13	Survival		75
10.14	Domicile of Loans		75
10.15	Register		75
10.16	Confidentiality		76
10.17	PATRIOT Act		77
10.18	Interest Rate Limitation		77
10.19	Lender Action		77
10.20	Severability		77
10.21	No Advisory or Fiduciary Responsibility		78
10.22	Payments Set Aside		78
10.23	Acknowledgement and Consent to Bail-in of EEA Financial Institutions		78

iv

SCHEDULE 1.01(a)	Lender’s Address
SCHEDULE 1.01(b)	Existing Indebtedness
SCHEDULE 1.01(c)	Existing Liens
SCHEDULE 6.11	Borrower Subsidiaries and Ownership Percentages
SCHEDULE 6.25	Anti-Corruption Laws, Sanctions, and Anti-Money Laundering Laws
SCHEDULE 6.28	Transactions with Affiliates
SCHEDULE 8.14	Restrictive Agreements
SCHEDULE 10.03(a)	Borrower’s Address
EXHIBIT A	Form of Notice of Borrowing
EXHIBIT B-1	Form of NY Note
EXHIBIT B-2	Form of Peruvian Note
EXHIBIT C	Form of Solvency Certificate
EXHIBIT D	Form of Closing Date Certificate
EXHIBIT E-1	Forms of Opinion of New York counsel to the Borrower
EXHIBIT E-2	Forms of Opinion of Peruvian counsel to the Borrower
EXHIBIT E-3	Form of Opinion of Chilean counsel to the Borrower
EXHIBIT E-4	Forms of Opinion of Peruvian counsel to the Lenders
EXHIBIT E-5	Form of Opinion of Chilean counsel to the Lenders
EXHIBIT F	Form of Assignment and Assumption Agreement
EXHIBIT G	Form of First Lien Chilean Share Pledge Agreement
EXHIBIT H	Form of Second Lien Chilean Share Pledge Agreement
EXHIBIT I	Form of Trust Agreement
EXHIBIT J	Form of Financial Ratio Certificate

v

LOAN AGREEMENT, dated as of July 31, 2019 (this “Agreement”), by and between GRAÑA Y MONTERO S.A.A., a Peruvian sociedad anónima abierta (the “Borrower”) and CS Peru Infrastructure Holdings LLC, a Delaware limited liability company, as Initial Lender (the “Initial Lender”), and any other financial institutions party hereto from time to time as Lenders (as defined herein), in each case, for so long as each of the Initial Lender or such financial institution, as applicable, is a Lender hereunder. All capitalized terms used herein and defined in Section 1.01 are used herein as therein defined.

W I T N E S S E T H:

WHEREAS, the Borrower has requested that the Initial Lender enter into this Agreement in order to extend credit in the form of term loans on the Closing Date in an aggregate principal amount of $35,000,000, and the Initial Lender has agreed to enter into this Agreement and to provide such term loan commitments on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the receipt and adequacy of which is hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1.    Definitions and Accounting Terms.

1.01    Defined Terms. As used in this Agreement, the following terms shall have the following meanings:

“Actual Knowledge” shall mean, with respect to any Person and any matter, the earlier of actual knowledge of, or receipt of written notice by, an officer or other authorized person of such Person whose responsibilities include the administration of the transactions contemplated by the Credit Documents for which this definition is referenced.

“Adexus” shall mean Adexus S.A., a Chilean sociedad anónima cerrada.

“Adexus Financing Lien” shall mean the pledge over 37,929 Equity Interests of Adexus owned by the Borrower, granted by the Borrower in favor of Ameris Deuda Directa Fondo de Inversión and Fondo de Inversión Falcom Chilean Fixed Income pursuant to the pledge agreement over shares (contrato de prenda mercantil), dated August 17, 2018.

“Adexus Sale Information” shall have the meaning provided in Section 7.01(a)(vi).

“Affected Property” shall mean any property of the Borrower or any Main Subsidiary that suffers an Event of Loss.

“Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power (i) to vote twenty percent (20%) or more of the securities having ordinary voting power for the election of directors (or equivalent governing body) of such Person or (ii) to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise.

“Agreement” shall have the meaning specified in the introductory paragraph hereto.

“ Anti-Corruption Laws” shall mean any of the following (a) the United States Foreign Corrupt Practices Act of 1977, as amended, (b) the UK Bribery Act 2010, (c) any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and (d) all other similar laws, rules and regulations of any jurisdiction applicable to the Borrower or any Borrower Subsidiary from time to time concerning or relating to bribery or corruption.

“Anti-Terrorism and Anti-Money Laundering Laws” shall mean any of the following (a) Section 1 of Executive Order 13224 of September 24, 2001, Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (Title 12, Part 595 of the US Code of Federal Regulations), (b) the Terrorism Sanctions Regulations (Title 31 Part 595 of the US Code of Federal Regulations), (c) the Terrorism List Governments Sanctions Regulations (Title 31 Part 596 of the US Code of Federal Regulations), (d) the Foreign Terrorist Organizations Sanctions Regulations (Title 31 Part 597 of the US Code of Federal Regulations), (e) the USA Patriot Act of 2001 (Pub. L. No. 107-56), (f) the U.S. Money Laundering Control Act of 1986, as amended, (g) the Bank Secrecy Act, 31 U.S.C. sections 5301 et seq., (h) Laundering of Monetary Instruments, 18 U.S.C. section 1956, (i) Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity, 18 U.S.C. section 1957, (j) the Financial Recordkeeping and Reporting of Currency and Foreign Transactions Regulations (Title 31 Part 103 of the US Code of Federal Regulations), (k) similar legislation of the European Union, (l) Peruvian Anti-Money Laundering Law, Legislative Decree Nº 1106 (Decreto Legislativo de lucha eficaz contra el lavado de activos y otros delitos relacionados a la minería ilegal y crimen organizado), (m) Peruvian Anti-Terrorism Law Decree, Law Decree N° 25475 (Establecen la penalidad para los delitos de terrorismo y los procedimientos para la investigación, la instrucción y el juicio), (n) any other similar law applicable to the Borrower or any Borrower Subsidiary concerning or relating to anti-money laundering, terrorist acts or acts of war, and (o) any regulations promulgated under any of the foregoing.

“Applicable Lending Office” shall mean, (i) for the Initial Lender, the office located at the address set forth opposite its name on Schedule 1.01(a) through which it intends to perform its obligations under this Agreement and (ii) with respect to the Initial Lender or any other Lender following the Closing Date, such address provided in writing by such Lender to the Borrower and the other Lenders (1) by not less than five (5) Business Days’ written notice where the Applicable Lending Office is situated in a Financial Action Task Force country or (2) so long as no Default or Event of Default shall have occurred and be continuing, with the prior written consent of the Borrower (not to be unreasonably withheld, conditioned or delayed), where the Applicable Lending Office is situated in a non-Financial Action Task Force country to the address set forth opposite its name on the applicable signature page hereto.

2

“Applicable Make-Whole Rate” shall mean, with respect to the Loans, the rate per annum by reference to the following table:

Period	Applicable Make- Whole Rate
For the period from and including the Closing Date to but excluding the date that is twelve (12) months after the Closing Date	6.55%
For the period from and including the date that is twelve (12) months after the Closing Date to but excluding the date that is eighteen (18) months after the Closing Date	6.80%

“Applicable Rate” shall mean, with respect to the Loans, the rate per annum by reference to the following table:

Period	Applicable Rate
For the period from and including the Closing Date to but excluding the date that is six (6) months after the Closing Date	9.10%
For the period from and including the date that is six (6) months after the Closing Date to but excluding the date that is one (1) year after the Closing Date	9.35%
For the period from and including the date that is one (1) year after the Closing Date to but excluding the date that is thirty (30) months after the Closing Date	9.60%
For the period from and including the date that is thirty (30) months after the Closing Date to the Facility Maturity Date	10.10%

“Asset Sale” shall mean any sale, transfer (including, without limitation, any transfer to a trust (transferencia en dominio fiduciario)) or other disposition by the Borrower or any Main Subsidiary to any Person (including by way of redemption by such Person) of any asset (including any Equity Interests of or in another Person), other than (a) inventory (or other assets) sold, leased or licensed out in the ordinary course of business (excluding any such sales, leases or licenses out by operations or divisions discontinued or to be discontinued), (b) sales of obsolete, worn-out or surplus property, (c) assets or equipment in the ordinary course of business, or (d) non-material assets for an amount not to exceed, individually or in the aggregate, $2,000,000 per calendar year.

3

“Assignment and Assumption Agreement” shall mean an Assignment and Assumption Agreement substantially in the form of Exhibit F (appropriately completed).

“Authorized Officer” shall mean, with respect to (a) delivering the Notice of Borrowing, any person or persons that has or have been authorized by the board of directors (or equivalent governing body) of the Borrower, or by its corporate powers-of-attorney duly approved and registered in the corresponding registry, to deliver such notices pursuant to this Agreement, (b) delivering financial information and officer’s certificates pursuant to this Agreement, the chief executive officer, the chief financial officer, the chief operating officer, the treasurer or the principal accounting officer of the Borrower, and (c) any other matter in connection with this Agreement or any other Credit Document, any officer (or a person or persons so designated by any two officers) of the Borrower.

“Bail-in Action” shall mean the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“Bail-in Legislation” shall mean, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-in Legislation Schedule.

“Bankruptcy” shall have the meaning provided Section 9.09.

“Bankruptcy Code” shall mean 11 U.S.C. § 101 et. seq., as now and hereafter in effect, or any successor statute.

“Borrower” shall have the meaning provided in the introductory paragraph hereto.

“Borrower Subsidiary” shall mean any Subsidiary of the Borrower.

“Borrowing” shall mean the borrowing of the Loans on the Closing Date.

“Business Day” shall mean any day except Saturday, Sunday and any day which shall be in New York, New York or Lima, Peru a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close.

“Capitalized Lease Obligations” shall mean, with respect to any Person, all rental obligations of such Person which, under IFRS, are or will be required to be capitalized on the books of such Person, in each case taken at the amount thereof accounted for as indebtedness in accordance with such principles.

“Cash Equivalents” shall mean, as to any Person, (a) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof), (b) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within six (6) months from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody’s, (c) time deposits, deposit accounts, certificates of deposit and banker’s

4

acceptances of any Lender or any member of the Federal Reserve System which is organized under the laws of the United States or any political subdivision thereof or under the laws of Canada, Japan, Switzerland or any country which is a member of the European Union, or any commercial bank organized under the laws of Peru, or which is the principal Peruvian banking subsidiary of a bank holding company having a combined capital and surplus of at least $500,000,000 and having a long-term unsecured debt rating of at least “A” or the equivalent thereof from S&P or “A2” or the equivalent thereof from Moody’s with maturities of not more than six (6) months from the date of acquisition by such Person, (d) repurchase obligations with a term of not more than seven (7) days for underlying securities of the types described in clause (a) above entered into with any bank meeting the qualifications specified in clause (c) above; provided that such repurchase obligations shall be fully secured by obligations of the type described in clause (a) above, and the possession of such obligations shall be transferred to, and segregated from other obligations owned by, such bank, (e) a money market fund or a qualified investment fund (including any such fund for which any Lender or any Affiliate thereof acts as an advisor or manager) given one of the two highest long-term ratings by S&P, Moody’s or Fitch, (f) Eurodollar certificates of deposit issued by any Lender, or any other bank meeting the requirements of clause (c) above, (g) deposits that are fully insured by the Federal Deposit Insurance Corporation and do not have an ‘r’ suffix attached to their rating, (h) commercial paper issued by any Person incorporated in the United States rated at least “A-1” or the equivalent thereof by S&P or at least “P-1” or the equivalent thereof by Moody’s and in each case maturing not more than three-hundred sixty-five (365) days after the date of acquisition by such Person, (i) principal-only strips and interest-only strips of non-callable obligations issued by the U.S. Treasury, and REFCORP securities stripped by the Federal Reserve Bank of New York and (j) investments in money market funds substantially all of whose assets are comprised of securities of the types described in clauses (a) through (i) above.

“Change in Law” shall mean the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any applicable law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd- Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Change of Control” shall mean, with respect to the Borrower, the acquisition by any Person or “group” (within the meaning of Rule 13d-5 of the Securities Exchange Act of 1934) of beneficial ownership (determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934) of Equity Interests of the Borrower, the result of which is that such Person or group beneficially owns fifty percent (50%) or more of the aggregate voting power of all then issued and outstanding Equity Interests of the Borrower (other than such Equity Interests having voting power only by reason of the happening of a contingency which contingency has not yet occurred). For purposes of the foregoing, the phrase “voting power” means, with respect to an issuer of Equity Interests, the power under ordinary circumstances to vote for the election of members of the board of directors of such issuer.

5

“Chile” shall mean the Republic of Chile.

“Chilean Bankruptcy Law” shall mean the Chilean law No. 20,750 (Ley de Reorganización y Liquidación de activos de Empresas y Personas), as amended, replaced and/or supplemented from time to time.

“Chilean Civil Registry” shall mean Servicio de Registro Civil e Identificacion of Chile.

“Claims” shall have the meaning provided in the definition of “Environmental Claims”.

“Closing Date” shall mean the date on which this Agreement shall have been executed and delivered by the parties hereto and on which all of the conditions precedent in Section 5 to the disbursement of the Loans have been satisfied or waived by the Initial Lender and the Loans are funded in accordance with the terms of this Agreement.

“Code” shall mean the United States Internal Revenue Code of 1986, as amended.

“Collateral” shall mean all of the “Collateral” and “Pledged Collateral” or other similar term referred to in the Security Documents and all of the other property that is or is intended under the terms of the Security Documents to be subject to Liens in favor of the Lenders, including but not limited to first-priority liens, in favor of all of the Lenders over the funds in the Dividend Collection Account (including each sub-account thereof).

“Collection Account Dividends” shall mean the proceeds of the Dividends required to be paid by the Main Subsidiaries, in respect of the Equity Interests owned by the Borrower in such Main Subsidiaries and which proceeds are, in accordance with the terms of the Trust Agreement, each Irrevocable Instruction Letter and each Notification, as applicable, required to be deposited in the Dividend Collection Account.

“Commitment” shall mean, for the Initial Lender, the commitment of the Initial Lender to make a Loan hereunder up to $35,000,000, as the same may be terminated pursuant to Sections 4.02 and/or 9. The aggregate principal amount of the Initial Lender’s Commitment on the Closing Date is $35,000,000.

“Concession Agreements” shall mean, collectively, the Line 1 Concession Agreement and the Norvial Concession Agreement.

“Condemnation” shall mean any taking, seizure, confiscation, requisition, exercise of rights of eminent domain, public improvement, inverse condemnation, condemnation, expropriation, nationalization or similar action of or proceeding by any Governmental Authority. “Condemn” shall have a correlative meaning.

6

“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Consolidated” in respect of any Person refers to the consolidation of accounts of a Person and its Subsidiaries in accordance with IFRS.

“Consolidated EBITDA” for any period, shall mean, with respect to the Borrower on a Consolidated basis, without duplication, net profit plus, to the extent deducted in calculating such net profit, (i) financial (expense) income, net; (ii) income tax; (iii) depreciation and amortization; (iv) the amount corresponding to the tariff for the Line 1 Concession Agreement actually paid to GyM Ferrovias during such period (on account of the Peruvian government’s repayment of amounts invested by GyM Ferrovias to purchase trains and other infrastructure for the Line 1 Concession Agreement); and (v) the portion of costs of sales during such period related to the purchase of land in the Borrower’s real estate segment, in each case determined in accordance with IFRS.

“ Consolidated EBITDA to Consolidated Interest Expense Ratio” shall mean, on any day, the ratio of (i) Consolidated EBITDA for the Rolling Period ended on such day (or, if such day is not the last day of a Fiscal Quarter of the Borrower, ended on the last day of the Fiscal Quarter of the Borrower most recently ended prior to such day) (for purposes of this definition, such period, the “reference period”) to (ii) Consolidated Interest Expense for the reference period.

“Consolidated Indebtedness” shall mean, at the end of each Fiscal Quarter, with respect to the Borrower, Indebtedness of the Borrower on a Consolidated basis, less the Norvial Holdco Facility Indebtedness.

“Consolidated Interest Expense” for any period, shall mean, with respect to the Borrower on a Consolidated basis, the aggregate interest expense in respect of Indebtedness (including, without limitation, all discounts (including the amortization of original issue discount), non-cash interest payments or accruals, premium payments, fees, commissions and other fees and charges (e.g., fees with respect to letters of credit) and any portion of rent expense with respect to such period under capital leases, in each case to the extent treated as interest (without duplication) in accordance with IFRS, and scheduled net payments under any Hedge Agreement) for such period.

“Contingent Obligation” shall mean, as to any Person, (a) any obligation of such Person as a result of such Person being a general partner of any other Person, unless the underlying obligation is expressly made non-recourse as to such general partner, and (b) any obligation of such Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold

7

harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include (A) endorsements of instruments for deposit or collection in the ordinary course of business or (B) any unmatured reimbursement obligation of any Person in respect of any performance bond, advance payment bond, letters of credit, or similar instrument provided in respect of any construction, operation, concessions, public-private partnership and real estate obligations of such Person in the ordinary course of business in accordance with past practice; provided, however, that once such reimbursement obligation shall arise and become payable, the same shall constitute a Contingent Obligation and shall constitute Indebtedness under this Agreement. The amount of any Contingent Obligation at any time shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

“Contractual Obligation” shall mean, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Credit Documents” shall mean this Agreement, any Notes (for the avoidance of doubt, in the case of the Peruvian Notes, together with their corresponding instructions letters) issued to any Lender, the Fee Letter, the Irrevocable Instruction Letters, the Notifications and the Security Documents.

“Debtor Relief Laws” shall mean the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Governmental Rules (including, without limitation, the Peruvian Bankruptcy Law and the Chilean Bankruptcy Law) of the United States, Peru and Chile or other applicable jurisdictions from time to time in effect.

“Default” shall mean any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default.

“ Defaulting Lender” shall mean any Lender that has a direct or indirect parent company that has, (i) become the subject of a voluntary proceeding under any bankruptcy or other Debtor Relief Law or has become the subject of a Bail-In Action, (ii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any voluntary or involuntary proceeding under any bankruptcy or other Debtor Relief Law or any such appointment; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements

8

made with such Lender. Any determination by the Required Lenders that a Lender is a Defaulting Lender under any one or more clauses (i) through (iii) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender upon delivery of written notice by the Required Lenders of such determination to the Borrower and each Lender.

“Default Rate” shall mean an interest rate equal to the interest rate otherwise then-applicable to the Loans, plus two percent (2%) per annum.

“ Distribution” shall mean any Dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Main Subsidiary (except to the Borrower) or any payment (whether in cash, securities or other property other than common equity), including any sinking fund or similar deposit, on account of the purchase, redemption, defeasance, retirement, acquisition, cancellation or termination of any Equity Interests in the Borrower or any Main Subsidiary (except to the Borrower or any option, warrant or other right to acquire any such Equity Interest in the Borrower).

“Dividend” shall mean, with respect to any Person, that such Person has declared or paid a dividend, distribution or returned any equity capital to its stockholders, partners or members or authorized or made any other distribution, payment or delivery of property (other than common Equity Interests of such Person) or cash to its stockholders, partners or members in their capacity as such, or redeemed, retired, purchased or otherwise acquired, directly or indirectly, for a consideration any shares of any class of its capital stock or any other Equity Interests outstanding on or after the Closing Date (or any options or warrants issued by such Person with respect to its capital stock or other Equity Interests), or set aside any funds for any of the foregoing purposes, or shall have permitted any of its Subsidiaries to purchase or otherwise acquire for a consideration any shares of any class of the capital stock or any other Equity Interests of such Person outstanding on or after the Closing Date (or any options or warrants issued by such Person with respect to its capital stock or other Equity Interests). Without limiting the foregoing, “Dividends” with respect to any Person shall also include all payments made or required to be made by such Person with respect to any stock appreciation rights, plans, equity incentive or achievement plans or any similar plans or setting aside of any funds for the foregoing purposes.

“Dividend Collection Account” shall mean the account (including any related sub-accounts) established and maintained in the trust incorporated by the Trust Agreement, for the benefit of all of the Lenders, in which all Collection Account Dividends are required to be deposited in accordance with the terms of the Trust Agreement, each Irrevocable Instruction Letter and each Notification, as applicable.

“Dollars” and the sign “$” shall each mean freely transferable lawful money of the United States.

“EEA Financial Institution” shall mean (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

9

“EEA Member Country” shall mean any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” shall mean any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“Environmental Claims” shall mean any and all administrative, regulatory or judicial actions, suits, demands, demand letters, directives, claims, liens, notices of noncompliance or violation, investigations and/or proceedings (hereafter, “Claims”) relating in any way to, or alleging or asserting, any noncompliance with, or liability arising under, Environmental Law or to any permit issued, or any approval given, under any Environmental Law, including (a) any and all Claims by any Governmental Authority for enforcement, cleanup, removal, response, remedial or other actions or fines, penalties, damages and costs (including investigatory costs, costs of response and attorneys’ fees) pursuant to any Environmental Law, and (b) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief arising out of or relating to an alleged injury or threat of injury to human health, safety or the environment due to the use or presence of Hazardous Materials in the environment.

“Environmental Law” shall mean any applicable Governmental Rule now or hereafter in effect and in each case as amended, and any binding judicial or administrative interpretation thereof, relating to the protection of the environment, or of human health (as it relates to the exposure to Hazardous Materials) or to the presence, Release or threatened Release, or the manufacture, use, transportation, treatment, storage, disposal or recycling of Hazardous Materials.

“Equity Interests” of any Person shall mean any and all shares, interests, rights to purchase, warrants, options, participation or other equivalents of or interest in (however designated) equity of such Person, including any capital stock, common stock, shares, beneficiary shares, preferred stock or other securities, any convertible preferred equity certificates, any limited or general partnership interest and any limited liability company membership interest.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ERISA Plan” shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“EU Bail-in Legislation Schedule” shall mean the EU Bail-in Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

10

“Event of Default” shall have the meaning provided in Section 9.

“Event of Loss” shall mean any loss of, destruction of or damage to, or any Condemnation or other taking of any property of the Borrower.

“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), including withholding tax at the applicable rate (except for the withholding tax on interest included in the definition of Indemnified Taxes), and similar franchise Taxes and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its Applicable Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) Taxes attributable to such Recipient’s failure to comply with Section 4.04(e) and (c) Taxes imposed under FATCA.

“Existing Indebtedness” shall mean the existing Indebtedness of the Borrower and the Main Subsidiaries listed on Schedule 1.01(b), including any principal, interest, fees and other amounts owing thereunder to the extent the same is considered Indebtedness.

“Facility Maturity Date” shall mean the date that is three (3) years after the Closing Date.

“Fair Market Value” shall mean, with respect to any asset (including any Equity Interests of any Person), the price at which a willing buyer and a willing seller who does not have to sell, would agree to purchase and sell in an arm’s length transaction such asset, as determined in good faith by the board of directors or other governing body or, pursuant to a specific delegation of authority by such board of directors or governing body, a designated senior executive officer, of the Borrower or any Main Subsidiary selling such asset.

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations, published guidance or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

“Fee Letter” shall mean the fee letter, dated as of July 31, 2019, by and between the Borrower and Gramercy Funds Management LLC.

“Financial Action Task Force” shall mean the Financial Action Task Force on Money Laundering, an inter-governmental body the purpose of which is, among other things, the development and promotion of policies, at both national and international levels, to combat money laundering.

“Financial Ratio Certificate” shall have the meaning provided in Section 7.01(b).

“First Lien Chilean Share Pledge Agreement” shall mean, collectively, (i) the first lien priority pledge over shares (Contrato de Prenda sin Desplazamiento de Primer Grado sobre

11

Acciones) governed by Chilean law and entered into as of the Closing Date by the Borrower, as pledgor, and the Initial Lender, as pledgee, substantially in the form of Exhibit G, of 296,570 of the Borrower’s existing Equity Interests (including economic ownership interests and voting rights) in Adexus, (ii) the first lien priority pledge over shares (Prenda sin Desplazamiento de Primer Grado sobre Acciones) governed by Chilean law of 37,929 of the Borrower’s existing Equity Interests (including economic ownership interests and voting rights) in Adexus, to be perfected after the Closing Date upon the payment and release of the Adexus Financing Lien and grant by the Borrower, as pledgor, and (iii) the first lien priority pledge over shares (Prenda sin Desplazamiento de Primer Grado sobre Acciones) governed by Chilean law to be granted from time to time by the Borrower, as pledgor, substantially in the form of Annex Two of Exhibit G, of all of the Borrower’s future Equity Interests (including economic ownership interests and voting rights) in Adexus.

“Fiscal Quarter” shall mean, for any Fiscal Year, (a) the fiscal period commencing on January 1 of such Fiscal Year and ending on March 31 of such Fiscal Year, (b) the fiscal period commencing on April 1 of such Fiscal Year and ending on June 30 of such Fiscal Year, (c) the fiscal period commencing on July 1 of such Fiscal Year and ending on September 30 of such Fiscal Year and (d) the fiscal period commencing on October 1 of such Fiscal Year and ending on December 31 of such Fiscal Year.

“ Fiscal Year” shall mean the fiscal year of the Borrower ending on December 31 of each calendar year.

“Fitch” shall mean Fitch Investors Service, Inc. or its successors.

“GMI” shall mean GMI S.A. Ingenierios Consultores, a sociedad anónima.

“GMP” shall mean Graña y Montero Petrolera S.A., a Peruvian sociedad anónima.

“GMP Oil Fields” shall mean GMP’s oil fields three and four located in Talara, Piura, Perú.

“Governmental Approvals” shall mean all authorizations, consents, approvals, certifications, waivers, exceptions, variances, filings, registrations, qualifications, permits, concessions, grants, franchises, licenses, agreements, directive requirements, orders, licenses, exemptions and declarations of or with any Governmental Authority.

“Governmental Authority” shall mean the government of the United States, Chile or Peru, as applicable, any other nation or any political subdivision thereof, whether state, regional, national, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, treasury, taxing, regulatory or administrative powers or functions of or pertaining to government and having jurisdiction over the Person or matters in question (including any supra national body exercising such powers or functions, such as the European Union or the European Central Bank).

“Governmental Rule” shall mean any statute, law, regulation, ordinance, rule, judgment, order, decree, treaty or other governmental restriction or any similar form of decision of or determination by or any interpretation or administration of any of the foregoing, in each case, having the force of law by, any Governmental Authority, which is applicable to any Person, whether now or hereafter in effect.

12

“GyM” shall mean GyM S.A., a Peruvian sociedad anónima.

“GyM Capital Contribution” shall have the meaning provided in Section 7.15(a).

“GyM Ferrovias” shall mean GyM Ferrovias S.A., a Peruvian sociedad anónima.

“Hazardous Materials” shall mean any chemicals, materials, wastes, pollutants, contaminants or substances in any form that is prohibited, limited or regulated pursuant to any Environmental Law by virtue of their toxic or otherwise deleterious characteristics making them dangerous to human health and safety or the environment, including any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, dielectric fluid containing levels of polychlorinated biphenyls, and radon gas.

“Hedge Agreements” shall mean (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross- currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

“IFRS” shall mean International Financial Reporting Standards, as issued by the International Accounting Standards Board; provided that determinations in accordance with IFRS for purposes of the Sections 4.02 and 8, including defined terms as used therein, and for all purposes of determining the Leverage Ratio, are subject (to the extent provided therein) to Section 10.07.

“Indebtedness” of any Person at any date shall mean, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (iii) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (iv) all obligations of such Person in respect of the deferred purchase price of property or services (excluding trade and current accounts payable arising in the ordinary course of business that are not overdue for more than ninety (90) days), (v) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has

13

been assumed, (vi) all Indebtedness of others guaranteed by such Person, (vii) all Capitalized Lease Obligations of such Person, (viii) all Contingent Obligations of such Person, (ix) all Off-Balance Sheet Liabilities of such Person, (x) all obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, of such Person (including in respect of sale and leaseback transactions) that are not classified and accounted for as capital leases on the balance sheet of such Person under IFRS, (xi) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit acceptance facilities, letters of guaranty or similar instruments, but excluding those entered into in the ordinary course of business to pay trade accounts payable and other obligations that do not constitute Indebtedness (including, but not limited to, performance bonds, advance payment bonds and bid/offer payment bonds), (xii) all obligations of such Person to purchase securities or other property that arise out of or in connection with the sale of the same or substantially similar securities or property, (xiii) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (xiv) all net obligations then due and owing (if any) of such Person under Hedge Agreements, (xv) all obligations of such Person under a Synthetic Lease and (xvi) all other obligations of such Person that are required to be reflected in, or are reflected in, such Person’s financial statements, recorded or treated as “debt” under IFRS. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

“Indemnified Person” shall have the meaning provided in Section 10.01(a).

“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower or any Main Subsidiary, as applicable, under any Credit Document and (b) to the extent not otherwise described in clause (a), Other Taxes. The Borrower hereby acknowledges and agrees that withholding Tax on foreign Indebtedness is an Indemnified Tax and, unless otherwise agreed to with the applicable Lender, will withhold such Tax with respect to any payment to such Lender that is not a Peruvian resident and shall gross up payments to such Lender in accordance with Section 4.04(a).

“Initial Lender” shall have the meaning specified in the introductory paragraph hereto.

“Intellectual Property” shall mean trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights.

“Inversiones en Autopistas” shall mean Inversiones en Autopistas S.A., a sociedad anónima.

“ Investments” shall mean, for any Person: (a) the acquisition (whether for cash, property, services or securities or otherwise) of Equity Interests, bonds, notes, debentures, partnership or other ownership interests or other securities of any other Person or any agreement to make any such acquisition (including any “short sale” or any sale of any securities at a time when such securities are not owned by the Person entering into such sale), (b) the making of any deposit with, or advance, loan or other extension of credit to, any other Person (including the purchase of property from another Person subject to an understanding or agreement, contingent or otherwise,

14

to resell such property to such Person), (c) the entering into any Contingent Obligation with respect to, Indebtedness or other liability of any other Person and (without duplication) any amount committed to be advanced, lent or extended to such Person, (d) the entering into of any Hedge Agreement, (e) any purchase or other acquisition of Indebtedness or the assets of such Person, or (f) any capital contribution to such Person.

“Irrevocable Instruction Letters” shall mean those certain letters (Cartas de Instrucción Irrevocable), to be sent in accordance with the terms of Section 7.2.3 of the Trust Agreement by the relevant Peruvian notary public, after such notary public’s receipt of the fully-executed copy of the applicable letter from the Trustee, to Norvial and GyM Ferrovias, in each case, requiring and directing Norvial and GyM Ferrovias, respectively, deposit the applicable Collection Account Dividends into the Dividend Collection Account.

“Leaseholds” of any Person shall mean all the right, title and interest of such Person as lessee or licensee in, to and under leases or licenses of land, improvements and/or fixtures.

“Lender” shall mean the Initial Lender as well as any Person that becomes a “Lender” hereunder pursuant to Section 10.04(b).

“Lender Account” shall mean the account number 1912621892166 established and maintained in Banco de Crédito del Perú, for the benefit of all of the Lenders

“Leverage Ratio” shall mean the ratio between: (i) Consolidated Indebtedness to (ii) Consolidated EBITDA.

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, transfer to a guarantee trust, deposit arrangement, encumbrance, lien (statutory or other), preference, caución, garantía mobiliaria, priority or other security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any authorized and effective financing or similar statement or notice filed under the UCC or any other similar recording or notice statute, and any lease having substantially the same effect as any of the foregoing).

“Line 1 Concession Agreement” shall mean the Contrato de Concesión del Sistema Eléctrico de Transporte Masivo de Lima y Callao, Línea 1, Villa El Salvador – Av. Grau – San Juan de Lurigancho, dated as of April 11, 2011, as amended on November 13, 2013, July 23, 2014, February 12, 2016 and July 11, 2016 entered into by the Republic of Peru acting through the Peruvian Ministry of Transport and Communications (Ministerio de Transportes y Comunicaciones) and GyM Ferrovías which granted the Line 1 concession to GyM Ferrovías.

“Loan” shall have the meaning provided in Section 2.01.

“Local Facility” shall mean, collectively, (a) a syndicated loan facility of up to $162,000,000 granted by the Local Facility Lenders, consisting of (i) a revolving facility of GyM, (ii) a term loan facility of GyM and (iii) a term loan facility for the reimbursement of outstanding surety bonds, performance bonds, advance payment bonds, bid/offer payment bonds, letters of credit and similar instruments issued for the account of the Borrower or any Borrower Subsidiary in their ordinary course of business (provided that, there shall be no recourse to the Borrower pursuant to any such term loan facility contemplated in sub-clauses (i) and (ii) above (other than

15

the Local Facility Borrower Pledges)), (b) a standby letter of credit facility of up to $200,000,000 for the issuance of new standby letters of credit for the account of the Borrower and GyM to serve as surety bonds, performance bonds, advance payment bonds, bid/offer payment bonds, letters of credit or similar instruments of the Borrower or any of its Subsidiaries in their ordinary course of business to be granted by the Local Facility Lenders and (c) a commitment for the maintenance and renewal of existing standby letters of credit for the account of (i) the Borrower, (ii) GyM and/or (iii) Affiliates of the Borrower, as in effect on the Closing Date and as modified, amended and/or supplemented following the Closing Date so long as no such modification, amendment and/or supplement has an adverse impact on the Lenders; provided that, after giving effect to any draw under the facilities contemplated in sub-clauses (a), (b) and (c), as applicable, the Borrower must be in compliance with the Leverage Ratio on a pro forma basis.

“Local Facility Borrower Pledges” shall mean, collectively, (a) the trust over 98.24% of the issued and outstanding capital stock of GyM owned by the Borrower and over 99.81% of the issued and outstanding capital stock of Concar S.A. owned by the Borrower, in accordance with the terms of that certain trust agreement, dated as of June 27, 2017, by and between the Borrower and La Fiduciaria S.A. (as administrative agent of the Local Facility Lenders), among others, (b) the trust over the corporate headquarters of the Borrower located at Surquillo, recorded in Public Entry No. 41776862 of the Real Estate Registry of the Public Registry of Lima, in accordance with the terms of that certain trust agreement, dated as of June 27, 2017, by and between the Borrower and La Fiduciaria S.A. (as administrative agent of the Local Facility Lenders), among others, (c) the trust over certain rights from the Borrower to collect payments from Gasoducto Sur Peruano, in accordance with the terms of that certain trust agreement dated as of June 21, 2017, by and between the Borrower and La Fiduciaria S.A. (as administrative agent of the Local Facility Lenders), among others, and (d) the trust over rights in respect of the sale proceeds from any sale of CAM Servicios del Peru, CAM Chile, Adexus, Inmobiliaria Almonte S.A.C. and Almonte 2 S.A.C. that was contemplated as set forth in a divestment plan for the benefit of the Local Facility Lenders, in accordance with the terms of that certain trust agreement, dated as of October 18, 2017, by and between the Borrower and La Fiduciaria S.A. (as administrative agent of the Local Facility Lenders), among others.

“Local Facility Lenders” shall mean Banco de Crédito del Perú, Banco Internacional del Perú S.A.A., Scotiabank Perú S.A.A., BBVA Banco Continental, Citibank N.A. and Citibank del Perú S.A., or any of their affiliates who are lenders under the Local Facility, and any other financial institutions from time to time party to the Local Facility as lenders.

“Local Facility Waiver” shall mean the waiver letter entered into by the Local Facility Lenders, GyM and the Borrower, dated as of July 30, 2019.

“Loss Proceeds” shall mean insurance proceeds, condemnation awards or other similar compensation, awards, damages and payments or relief (exclusive, in each case, of proceeds of business interruption, workers’ compensation, employees’ liability, automobile liability, builders’ all risk liability and general liability insurance) with respect to any Event of Loss. For the avoidance of doubt, any liquidated damages or indemnities payable or paid by the Peruvian government to Gasoducto Sur Peruano S.A. or its creditors shall not be considered Loss Proceeds for purposes hereof.

16

“Main Subsidiary” shall mean Adexus, GMP, GyM Ferrovías and Norvial.

“Make-Whole Premium” shall mean, in the case of any mandatory repayment of the Loans specified in Section 4.02 on any day prior to the date that is eighteen (18) months after the Closing Date, (a) with respect to the first $15,000,000 of principal that is so repaid, an amount equal to the Applicable Make-Whole Rate that would have otherwise accrued in accordance with the terms hereof on the amount of the principal so prepaid or repaid from the date of prepayment or repayment through the date that is one (1) year thereafter, and (b) with respect any amounts in excess thereof, an amount equal to the Applicable Make-Whole Rate that would have otherwise accrued in accordance with the terms hereof on the amount of the principal so prepaid or repaid from the date of prepayment or repayment through the date that is eighteen (18) months after the Closing Date; provided that any exercise of the PIK Option (and any PIK Interest that would accrue upon such exercise during the PIK Election Period) shall be disregarded for purposes of calculation of any Make-Whole Premium, which shall be calculated on the basis of any cash interest amount corresponding to the Applicable Make-Whole Rate that would accrue and be payable on the principal amount of the Loans absent any exercise of the PIK Option.

“Margin Stock” shall have the meaning provided in Regulation U.

“Master Agreement” shall have the meaning provided in the definition of “Hedge Agreements”.

“Material Adverse Effect” shall mean any event, change, condition, occurrence or circumstance that individually or in the aggregate has had or could reasonably be expected to have a material adverse effect on (a) the property, assets, business, operations, liabilities, condition (financial or otherwise) or other prospects of the Borrower and/or any Main Subsidiary, (b) the rights and remedies of the Lenders granted or purported to be granted in the Credit Documents or (c) the ability of the Borrower to perform its obligations to the Lenders under the Credit Documents; provided that, (i) any settlement with the Peruvian government in relation to current investigations pending as of the Closing Date against the Borrower, the Borrower Subsidiaries, former representatives of the Borrower or the Borrower Subsidiaries and (ii) any incorporation of the Borrower or any Borrower Subsidiary into any investigation in which their former representatives are involved as of the Closing Date, in the case of both (i) and (ii), shall not in itself constitute a “Material Adverse Effect” but any impact thereof, in each case, may be evaluated within such definition.

“Maximum Rate” shall have the meaning provided in Section 10.18.

“Minimum Debt Exposure Ratio” shall mean at any time the ratio of (a) the aggregate amount of the proceeds of the Collection Account Dividends then on deposit in the Dividend Collection Account at the end of the applicable Rolling Period to (b) the aggregate of all amounts (of principal and interest) in respect of any Obligations due and payable by the Borrower.

“Minimum Debt Service Ratio” shall mean at any time the ratio of (a) the aggregate amount of the proceeds of the Collection Account Dividends deposited in the Dividend Collection Account during the preceding two consecutive Fiscal Quarters of the Borrower most recently ended as of the applicable Quarterly Payment Date to (b) the aggregate of all amounts (of principal and

17

interest) in respect of any Obligations due and payable by the Borrower for the two immediately succeeding Quarterly Payment Dates following such date of determination.

“Moody’s” shall mean Moody’s Investors Service, Inc. or its successors.

“Multiemployer Plan” shall mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA that is subject to Title IV of ERISA, contributed to by the Borrower or any ERISA Affiliate or was contributed to by the Borrower or any ERISA Affiliate in the past six (6) years.

“Net Cash Proceeds” shall mean, for any event requiring repayment of the Loans pursuant to Section 4.02, the gross cash proceeds received by the Borrower or any Main Subsidiary in connection with such event and payable by the Borrower or such Main Subsidiary, net of (i) Taxes directly attributable to such event (provided that, if all or a portion of such Taxes are not paid concurrently with the occurrence of such event, the Borrower or the relevant Main Subsidiary may reserve proceeds in an amount equal to such unpaid Taxes; provided, further, that, if (x) such unpaid Taxes are not paid when due or (y) any portion of such reserved amount of proceeds is not utilized to pay such unpaid Taxes when due, such reserved amount of proceeds or such unutilized portion thereof, as applicable, must be applied to repay the Loans in accordance with the terms of Section 4.02), (ii) any portion of proceeds that is required to be paid to any shareholder of any Main Subsidiary (other than the Borrower or any Borrower Subsidiary thereof), and (iii) the amount of reasonable transaction costs (including, as applicable, any underwriting, brokerage or other customary commissions and legal, advisory and other fees and out-of-pocket expenses associated therewith) paid by the Borrower and the Main Subsidiaries in connection with such event.

“Net Loss Proceeds” shall mean, in the case of any Event of Loss, the aggregate amount of Loss Proceeds received by the Borrower or any Main Subsidiary in respect of such Event of Loss, net of (i) Taxes directly attributable to such Event of Loss and payable by the Borrower or such Main Subsidiary (provided that, if all or a portion of such Taxes are not paid concurrently with the occurrence of such Event of Loss, the Borrower or the relevant Main Subsidiary may reserve Loss Proceeds in an amount equal to such unpaid Taxes; provided, further, that, if (x) such unpaid Taxes are not paid when due or (y) any portion of such reserved amount of Loss Proceeds is not utilized to pay such unpaid Taxes when due, such reserved amount of Loss Proceeds or such unutilized portion thereof, as applicable, must be applied to repay the Loans in accordance with the terms of Section 4.02), (ii) any portion of Loss Proceeds that is required to be paid to any shareholder of such Main Subsidiary (other than the Borrower or any Borrower Subsidiary thereof), and (iii) the amount of reasonable out-of-pocket costs and expenses paid by the Borrower and the Main Subsidiaries in connection with the collection of such Loss Proceeds.

“Norvial” shall mean Norvial S.A., a Peruvian sociedad anónima.

“Norvial Concession Agreement” shall mean the concession agreement, dated January 15, 2003 (as amended) for the construction and exploitation of the Ancon-Huacho-Pativilca tranche of the Panamericana Norte Highway entered into between the Peruvian government, acting through the Ministry of Transportation and Communications, as grantor, and Norvial, as concessionaire.

18

“Norvial Holdco Facility Indebtedness” shall mean the Acuerdo de Inversión, dated as of May 29, 2018, entered into by and between the Borrower and BCI Perú for an investment in Norvial through the acquisition of all the Class B shares issued by Norvial, as well as the Shareholders Agreement, dated as of June 11, 2018, by and among the Borrower, Inversiones Concesiones Vial S.A.C. and Inversiones en Autopistas.

“Note” shall have the meaning provided in Section 2.04(a).

“Notice of Borrowing” shall have the meaning provided in Section 2.02.

“ Notifications” shall mean those certain written notices to be sent in accordance with the terms of Section 7.2.1 of the Trust Agreement by (a) the Borrower to Adexus, and (b) after receipt of the fully-executed copy of the applicable written notice from the Trustee, the relevant Peruvian notary public to GMP, in each case, requiring and directing Adexus and GMP, as applicable, to deposit the applicable Collection Account Dividends into the Dividend Collection Account.

“NY Note” shall have the meaning provided in Section 2.04(a).

“Obligations” shall mean, collectively, without duplication: (a) all of the Borrower’s Indebtedness incurred under the Credit Documents, financial liabilities and obligations, of whatsoever nature and however evidenced (including, but not limited to, principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to the Borrower, would have accrued on any Obligation, whether or not a claim is allowed against the Borrower for such interest in the related bankruptcy proceeding), premium (including the Make-Whole Premium), fees, reimbursement obligations, indemnities and legal and other expenses, whether due after acceleration or otherwise) to the Lenders in their capacity as such under the Credit Documents, whether direct or indirect, absolute or contingent, and whether for principal, reimbursement obligations, interest, fees, premiums (including the Make-Whole Premium), penalties, indemnifications, contract causes of action, costs, expenses or otherwise; and (b) in the event of any proceeding for the collection or enforcement of the obligations described in clause

(a) above, after an Event of Default has occurred and is continuing, the expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by any Lender of its rights under the Security Documents.

“OFAC” shall mean the Office of Foreign Assets Control of the U.S. Department of the Treasury.

“Off-Balance Sheet Liabilities” of any Person shall mean (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any liability of such Person under any sale and leaseback transactions that do not create a liability on the balance sheet of such Person or (c) any obligation under a Synthetic Lease.

“Operating Expenses” shall mean any and all of the expenses paid or payable by or on behalf of the Borrower (or any Main Subsidiary) in relation to the operation and maintenance (except as set forth below) of the business of the Borrower, including payments under any operating lease, Taxes, insurance (including the costs of premiums and deductibles and brokers’ expenses), costs and fees attendant to obtaining and maintaining in effect the Governmental Approvals related to the business of the Borrower, payable during such period, and reasonable

19

legal, accounting and other professional fees attendant to any of the foregoing items payable during such period, including prepaid expenses but excluding payments in respect of Indebtedness (including the aggregate amount of scheduled payments of principal and interest in respect of such Indebtedness that was actually paid or was due and payable by the Borrower and the Main Subsidiaries during such period). Operating Expenses do not include non-cash charges, such as depreciation, amortization or other bookkeeping entries of a similar nature.

“ Other Connection Taxes” shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Credit Document, or sold or assigned an interest in any Loan or Credit Document).

“Other Taxes” shall mean any electronic funds transfer Taxes (including the Impuesto a las Transacciones Financieras) in respect of payments into and/or out of Peru and wire transfers between Dividend Collection Account and Lender Account, all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Credit Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment. The Borrower hereby acknowledges and agrees that withholding Tax on foreign Indebtedness is, to the extent not otherwise described in this Agreement, an Other Tax and, unless agreed otherwise to with the applicable Lender, will withhold such Tax with respect to any payment to such Lender that is not a Peruvian resident and shall gross up payments to such Lender in accordance with Section 4.04(a).

“Participant” shall have the meaning provided in Section 10.04(a).

“Participant Register” shall have the meaning provided in Section 10.04(e).

“PATRIOT Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56 (signed into law on October 26, 2001)), and all regulations promulgated thereunder.

“Permitted Business” shall mean the design, construction, development, engineering, ownership, operation and maintenance of infrastructure of private- and public-sector infrastructure projects and assets and other businesses ancillary or related thereto.

“Permitted Debt” shall have the meaning provided in Section 8.02.

“Permitted Intellectual Property Reorganization” shall mean the internal reorganization of Intellectual Property among the Borrower and any Borrower Subsidiaries so long as such internal reorganization of Intellectual Property does not have an adverse impact on the (a) Borrower’s or any Main Subsidiary’s ability to conduct their respective businesses in the ordinary course consistent with past practice and (b) Lenders and/or any or all of the Collateral.

20

“Permitted Liens” shall mean:

(a)    Liens created pursuant to or expressly permitted by this Agreement and the other Credit Documents to which any Lender is a party;

(b)    Liens, deposits or pledges incurred or created in the ordinary course of business in compliance with workers’ compensation, disability or unemployment insurance, pensions and other social security laws or regulations or under applicable Governmental Rules in connection with or to secure the performance of bids, tenders, contracts, leases, statutory obligations, surety bonds or appeal bonds, performance and return-of-money bonds, and other obligations of a substantially similar nature arising in the ordinary course of business and consistent with past practice;

(c)    mechanics’, materialmen’s, workers’, repairmens’, employees’, warehousemen’s, carriers’, landlord’s, vendor’s salary and other substantially similar Liens arising in the ordinary course of business or under Governmental Rules securing obligations incurred in connection with the business of the Borrower which are (i) not yet due, or which are adequately bonded or for which adequate reserves in accordance with IFRS have been made and (ii) which are being contested in good faith by appropriate proceedings diligently;

(d)    Liens for Taxes, assessments or governmental charges which are (i) not yet due or which are adequately bonded or for which adequate reserves in accordance with IFRS have been made and (ii) which are being contested in good faith by appropriate proceedings diligently;

(e)    Liens on equipment or fixed or capital assets (including capital leases) acquired (including in connection with any replacement), constructed, installed, repaired, restored, leased or improved by the Borrower securing Indebtedness permitted under Section 8.02(b) and (c);

(f)    easements, reservations, zoning restrictions, licenses, water rights, rights-of-way and similar charges or encumbrances on Real Property imposed by Governmental Rules or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the impacted property or materially interfere with the ordinary conduct of business of the Borrower and the Main Subsidiaries;

(g)    with respect to any Real Property, immaterial title defects or irregularities that do not, individually or in the aggregate, materially impair the use of such Real Property;

(h)    possessory Liens (arising customarily in respect of such transaction and not by means of a separate collateral security agreement) in favor of brokers and dealers arising in connection with the acquisition or disposition of Cash Equivalents permitted under this Agreement and in the ordinary course of business of the Borrower or any Main Subsidiary; provided that such Liens (i) attach only to such Investments and (ii) secure only obligations incurred in the ordinary course and arising in connection with the acquisition or disposition of such Investments and not any obligation in connection with margin financing or otherwise;

(i)    Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business of the Borrower or any Main Subsidiary;

21

(j)    legal or equitable encumbrances (other than any attachment prior to judgment, judgment lien or attachment in aid of execution on a judgment) derivative of any pending litigation or other legal proceeding not otherwise constituting an Event of Default if the same is effectively stayed or the claims secured thereby are being contested in good faith and by appropriate actions, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with IFRS to the extent required by IFRS;

(k)    Liens arising out of judgments or awards not constituting an Event of Default;

(l)    Liens for workers’ compensation awards and similar obligations arising by operation of law not then delinquent and any such Liens, whether or not delinquent, whose validity is at the time being contested in good faith and by appropriate proceedings, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with IFRS to the extent required by IFRS;

(m)    the replacement, extension or renewal of any Lien that is a Permitted Lien of the type contemplated in clause (e) above; provided that such Lien is in respect of the same assets originally subject thereto (and permitted hereunder) and arises out of the extension, renewal or replacement of the Indebtedness secured thereby to the extent permitted herein (without any increase in the amount thereof except to the extent permitted herein);

(n)    customary and applicable non-consensual statutory Liens and rights of setoff of financial institutions over deposit accounts held at such financial institutions arising in the ordinary course of business of the Borrower or any Main Subsidiary to the extent such Liens or rights of setoff secure or allow setoff (to the extent permitted hereunder) against amounts owing for fees and expenses relating to the applicable deposit account;

(o)    Liens existing on the Closing Date listed on Schedule 1.01(c);

(p)    Liens in favor of any third party purchaser (that is not an Affiliate of GMP, the Borrower or any Main Subsidiary) incurred in connection with any sale or other disposition of oil and/or gas produced by GMP and sold or otherwise disposed of to such unaffiliated third party purchaser (i) for which GMP receives an advance payment or payments in respect of such oil and/or gas, (ii) arising in the ordinary course of business of GMP and in accordance with its past practice, and (iii) which Liens extend only to and in respect of such oil and gas so sold;

(q)    Liens incurred or created by any Main Subsidiary as permitted by any Existing Indebtedness of such Main Subsidiary as of the Closing Date (without giving effect to any modifications, amendments and/or supplements thereto following the Closing Date);

(r)    (i) the Local Facility Borrower Pledges as in effect on the Closing Date and as modified, amended and/or supplemented following the Closing Date so long as no such modification, amendment and/or supplement has an adverse impact on the Borrower’s ability to comply with its obligations under the Credit Documents and (ii) Liens incurred in favor of the Local Facility Lenders that are over assets (including Equity Interests in) of any Borrower Subsidiary (other than any Main Subsidiary) that are non-recourse with respect to the Borrower or any Main Subsidiary and do not cause a Material Adverse Effect;

22

(s)    Liens on all or any portion of the Equity Interests owned by the Borrower or any Main Subsidiary in GMI and Viva GyM in favor of the Peruvian government incurred for the purpose of ensuring compliance with Law No. 30737;

(t)    Liens granted by GMP over its property, inventory, rights or cash flows in the ordinary course of business and consistent with past practice in connection with any Indebtedness permitted pursuant to Section 8.02 (n), (q) or (r); and

(u)    the Adexus Financing Lien, subject to Section 7.20(c).

“Person” shall mean any individual, partnership, joint venture, firm, corporation, association, limited liability company, trust or other enterprise or unincorporated organization or any Governmental Authority.

“Peru” shall have the meaning provided in the recitals hereto.

“Peruvian Bankruptcy Law” shall mean the Peruvian Bankruptcy Law (Ley General del Sistema Concursal”), as amended.

“Peruvian Note” shall have the meaning provided in Section 2.04(a).

“Peruvian Public Registry” shall mean Registro Mobiliario de Contratos de Lima.

“Petroperu” shall mean Petroleos del Perú – Petroperú S.A.

“PIK Election Period” shall have the meaning provided in Section 2.06(e).

“PIK Interest” shall have the meaning provided in Section 2.06(e).

“PIK Option” shall have the meaning provided in Section 2.06(e).

“Quarterly Payment Date” shall mean each March 31^st, June 30^th, September 30^th and December 31^st of each calendar year.

“Real Property” of any Person shall mean all the right, title and interest of such Person in and to land, improvements and fixtures, including Leaseholds.

“Recipient” shall mean any Lender.

“Register” shall have the meaning provided in Section 10.15.

“Regulation T” shall mean Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

“Regulation U” shall mean Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

“Regulation X” shall mean Regulation X of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

23

“Related Parties” shall mean, with respect to any specified Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers and representatives of such Person.

“Release” shall mean disposing, discharging, injecting, spilling, pumping, leaking, leaching, dumping, emitting, escaping, emptying, pouring, seeping, or migrating into, through or upon any land or water or air, or otherwise entering into the environment. “Released” shall have a correlative meaning.

“Required Lenders” shall mean (a) at any time prior to the Closing Date, Lenders the sum of whose outstanding Commitments at such time represents more than fifty percent (50%) of all Commitments of all Lenders, and (b) at any time following the Closing Date, Lenders the sum of whose outstanding Loans at such time represents more than fifty percent (50%) of all outstanding Loans of all Lenders.

“Restoration” shall mean, with respect to any Affected Property, to rebuild, repair, restore or replace such Affected Property.

“Rolling Period” shall mean, with respect to any Fiscal Quarter of the Borrower, such Fiscal Quarter and the three immediately preceding Fiscal Quarters considered as a single accounting period.

“S&P” shall mean Standard & Poor’s Ratings Services, a division of S&P Global Inc., or its successors.

“ Sanctioned Country” shall mean a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, limited to Cuba, the region of Crimea, Iran, North Korea and Syria).

“Sanctions” shall mean the economic or financial sanctions, requirements or trade embargoes imposed, administered or enforced from time to time by (a) U.S. Governmental Authorities (including OFAC, the U.S. Department of State and the U.S. Department of Commerce), the United Nations Security Council, the European Union and Her Majesty’s Treasury, and (b) any corresponding laws of jurisdictions in which the Borrower or any Borrower Subsidiary operates, to the extent applicable to such party.

“Scheduled Repayment” shall have the meaning provided in Section 4.02(a).

“Scheduled Repayment Date” shall have the meaning provided in Section 4.02(a).

“Second Lien Chilean Share Pledge Agreement” shall mean the second lien priority pledge agreement over shares (Contrato de Prenda sin Desplazamiento de Segundo Grado sobre Acciones) governed by Chilean law and entered into as of the Closing Date by the Borrower, as pledgor, and the Initial Lender, as pledgee, substantially in the form of Exhibit H, of 37,929 of the Borrower’s existing Equity Interests (including economic ownership interests and voting rights) in Adexus, which shall remain at all times in full force and effect until the satisfaction of the obligations set forth in Section 7.20(c) at which time the second lien priority will automatically become a first lien priority in accordance with the terms of the Second Lien Chilean Share Pledge Agreement.

24

“Security Document” shall mean and include each of the Trust Agreement, the First Lien Chilean Share Pledge Agreement, the Second Lien Chilean Share Pledge Agreement and, to the extent required by this Agreement or otherwise agreed to in writing by the Borrower, any other security agreements, pledge agreements or other similar agreements, documents, letters or instruments delivered to the Lenders that create or purport to create a Lien in favor of the Lenders.

“Soles” shall mean the lawful currency of Peru.

“Solvent” or “Solvency” shall mean, with respect to any Person (on a Consolidated basis) on any date of determination, that on such date, (a) the fair value of the assets of such Person exceeds, on a Consolidated basis, its debts and liabilities, subordinated or otherwise, (b) present fair saleable value of the property of such Person, on a Consolidated basis, is greater than the amount that will be required to pay the probable liability, on a Consolidated basis, of its debts and other liabilities, subordinated or otherwise, as such debts and other liabilities become absolute and matured, (c) such Person, on a Consolidated basis, is able to pay its debts and liabilities, subordinated or otherwise, as such liabilities become absolute and matured and (d) such Person, on a Consolidated basis, is not engaged in, and is not about to engage in, business for which it has unreasonably small capital.

“Subsidiary” shall mean, as to any Person, (a) any corporation more than fifty percent (50%) of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person and/or one or more Subsidiaries of such Person and (b) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Subsidiaries of such Person has more than a fifty percent (50%) Equity Interest at the time.

“SUNAT” shall mean the Superintendencia Nacional de Administración Tributaria.

“Synthetic Lease” shall mean a lease transaction under which the parties intend that (a) the lease will be treated as an “operating lease” by the lessee and (b) the lessee will be entitled to various tax and other benefits ordinarily available to owners (as opposed to lessees) of like property.

“Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax, penalties or similar liabilities applicable thereto.

“Transaction” shall mean the execution, delivery and performance by the Borrower and each applicable Subsidiary thereof (a) of the Credit Documents to which it is a party, the incurrence of the Loans on the Closing Date and the use of proceeds thereof and (b) the payment of fees and expenses in connection with the foregoing.

25

“Trust Agreement” shall mean that certain trust agreement (Contrato de Fideicomiso), dated as of July 31, 2019, by and between the Borrower and the Trustee, among others, substantially the form attached as Exhibit I.

“Trustee” shall mean La Fiduciaria S.A. or any successor thereto.

“ UCC” shall mean the Uniform Commercial Code as from time to time in effect in the relevant jurisdiction.

“United States” and “U.S.” shall each mean the United States of America.

“Viva GyM” shall mean Viva GyM S.A., a sociedad anónima.

“Withholding Agent” shall mean the Borrower, any Main Subsidiary or any Lender, as applicable.

“Write-Down and Conversion Powers” shall mean, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-in Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-in Legislation Schedule.

1.02    Other Definitional Provisions.

(a)    Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Credit Documents or any certificate or other document made or delivered pursuant hereto or thereto. As used herein and in the other Credit Documents, and any certificate or other document made or delivered pursuant hereto or thereto, (i) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (ii) the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings), (iii) unless the context otherwise requires, the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, Equity Interests, securities, revenues, accounts, leasehold interests and contract rights, (iv) the word “will” shall be construed to have the same meaning and effect as the word “shall”, (v) unless the context otherwise requires, any reference herein (A) to any Person shall be construed to include such Person’s successors and assigns (subject to any restrictions on assignments set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (B) to the Borrower shall be construed to include the Borrower as debtor and debtor-in-possession and any receiver or trustee for the Borrower in any insolvency or liquidation proceeding, (C) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented and/or otherwise modified (subject to any restrictions on such amendments, restatements, supplements and/or modifications set forth herein), and (D) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented and/or otherwise modified (including by succession of comparable successor laws), (vi) the word “law” shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and

26

interpretations thereunder having the force of law), and all judgments, orders and decrees, of all Governmental Authorities, (vii) references to “days” shall mean calendar days unless the term “Business Days” is used, and (viii) references to a time of day shall mean such time in New York, New York unless otherwise specified.

(b)    The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified and all references herein to Sections, Exhibits and Schedules, paragraphs and clauses, shall be construed to refer to Sections of, and Exhibits and Schedules to, this Agreement.

(c)    The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.

(d)    Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with IFRS. Notwithstanding any provisions of IFRS to the contrary, all calculations for purposes of the covenants contained in this Agreement shall (i) to the extent such calculations involve income statement or cash flow statement items for a period, convert all Sol amounts into Dollars using the daily average rate published by the SUNAT for such period and (ii) to the extent such calculations involve balance sheet items as of a date, convert all Sol amounts into Dollars using the rate published by the SUNAT for such date.

(e)    Any references to an amount that uses a Dollar-equivalent shall be deemed to be the Dollar-equivalent of such amount using the Dollar-Sol exchange rate from the immediately preceding Business Day.

(f)    All calculations in respect of the financial covenants set forth in Section 8.10 shall be made in accordance with IFRS and utilizing financial statements and related information that has been publicly filed on any stock exchange or with any securities regulator.

SECTION 2.    Amount and Terms of Credit.

2.01    The Commitments. Subject to and upon the terms and conditions set forth herein, each Lender severally agrees to make a single term loan (each, a “Loan” and, collectively, the “Loans”) to the Borrower on the Closing Date in a principal amount not to exceed its Commitment, which Loan (i) shall be incurred pursuant to a single Borrowing on the Closing Date, and (ii) shall be denominated in Dollars. Once repaid, the Loans incurred hereunder may not be reborrowed.

2.02    Notice of Borrowing. Whenever the Borrower desires to incur Loans hereunder, the Borrower shall give the Lenders prior written notice at least three (3) Business Days’ prior to the date the Loans are requested to be incurred hereunder; provided that, any such written notice shall be deemed to have been given on a certain day only if given before 11:00 a.m. (New York City time) on such day (or such later time as may be agreed by the Lenders). Such notice (the “Notice of Borrowing”), shall be irrevocable and shall be in writing and signed by an Authorized

27

Officer of the Borrower, in the form of Exhibit A, appropriately completed to specify: (A) the aggregate principal amount of the Loans to be incurred pursuant to such Borrowing; and (B) the date of such Borrowing (which shall be a Business Day and the Closing Date).

2.03    Disbursement of Funds. No later than 5:00 p.m. (New York City time) on the Business Day specified in the Notice of Borrowing (so long as each condition precedent set forth in Section 5 shall have been satisfied as of 9:00 a.m. (New York City time) on such date, other than those conditions which cannot be satisfied prior to concurrent funding of the Loans), each Lender will make available its pro rata portion (determined in accordance with Section 2.06) of each Borrowing requested to be made on such date. All such amounts will be made available in Dollars and in immediately available funds and will make available to such account as the Borrower may specify in writing prior to the Closing Date, the aggregate of the amounts so made available by the Lenders.

2.04    Notes.

(a)    The Borrower’s obligation to pay the principal of, and interest on, the Loans made by each Lender shall be evidenced in the Register maintained by the Initial Lender pursuant to Section 10.15 and shall, if requested by such Lender, also be evidenced by (at the sole option of such Lender) either (i) a promissory note duly executed and delivered by the Borrower substantially in the form of Exhibit B-1, with blanks appropriately completed in conformity herewith (each such promissory note, a “NY Note” and, collectively, the “NY Notes”), or (ii) an incomplete promissory note governed by the laws of Peru with blank spaces and its corresponding instructions letter (pagaré incompleto y acuerdo para el llenado de pagaré), issued by the Borrower, as issuer, pursuant to Law No. 27287 of Peru, as amended (Ley de Titulos Valores), in favor of each Lender evidencing the Loan made by such Lender (including any renewals or modifications thereof and substitutions therefor), in substantially the form set forth in Exhibit B-2 (each such incomplete promissory note and corresponding instructions letter, a “Peruvian Note”, and, collectively, the “Peruvian Notes”; and together with the NY Notes, the “Notes”, and any of such Notes individually, a “Note”).

(b)    Each Lender will note on its internal records the amount of each Loan made by it and each payment in respect thereof and prior to any transfer of its NY Note will endorse on the reverse side thereof the outstanding principal amount of Loans evidenced thereby. Failure to make any such notation or any error in such notation shall not affect the Borrower’s obligations in respect of such Loans.

(c)    Notwithstanding anything to the contrary contained above in this Section 2.04 or elsewhere in this Agreement, Notes shall only be delivered to Lenders which at any time specifically request the delivery of such Notes; provided, further, that, the Borrower shall only have the obligation to deliver one Note to each Lender that requests such Note. No failure of any Lender to request or obtain a Note evidencing its Loans to the Borrower shall affect or in any manner impair the obligations of the Borrower to pay the Loans (and all related Obligations) incurred by the Borrower which would otherwise be evidenced thereby in accordance with the requirements of this Agreement, and shall not in any way affect the security or guaranties therefor provided pursuant to the various Credit Documents. Any Lender which does not have a Note evidencing its outstanding Loans shall in no event be required to make the notations otherwise

28

described in preceding clause (b). At any time when any Lender requests the delivery of a Note to evidence any of its Loans, the Borrower shall promptly execute and deliver to the respective Lender the requested Note, in the case of any NY Note, in the appropriate amount or amounts to evidence such Loans, and in the case of any Peruvian Note, issued as an incomplete promissory note as contemplated in paragraph (a) above.

(d)    The principal amount, applicable interest rate and due date of each Peruvian Note shall be duly completed in accordance with the corresponding instructions letter, by which the Borrower authorizes such Lender to complete the Peruvian Note issued to its order in accordance with the terms set forth therein.

(e)    The payment of any part of the principal of any such Peruvian Note shall discharge the obligation of the Borrower under this Agreement to pay principal of the Loan evidenced by such Peruvian Note pro tanto, and the payment of any principal of a Loan in accordance with the terms hereof shall discharge the obligations of the Borrower under the Peruvian Note evidencing such Loan pro tanto. The payment of any interest accrued on any Peruvian Note shall pro tanto discharge the obligation of the Borrower to pay any such amount of interest on that portion of the Loan to which such Peruvian Note relates, and payment of interest accrued on any Loan shall pro tanto discharge the obligation of the Borrower to pay such amount of interest in respect of the Peruvian Note relating to the Loan to which such Peruvian Note relates. Notwithstanding the discharge in full of any Peruvian Note, (i) if the amount paid or payable under any such Peruvian Note is less than the amount due and payable in accordance with this Agreement with respect to the Loan evidenced by such Peruvian Note, to the fullest extent permitted under applicable law, the Borrower agrees, upon request by the applicable Lender, to deliver a new Peruvian Note reflecting such difference and pay to the applicable Lender upon demand such difference and (ii) if the amount paid or payable under any such Peruvian Note (whether arising from the enforcement thereof in Peru or otherwise) exceeds the amount due and payable in accordance with this Agreement with respect to the Loan evidenced by such Peruvian Note, each Lender that has received any amounts under such Peruvian Notes in excess of the amounts due to such Lender hereunder agrees, to the fullest extent permitted under applicable law, to pay such excess to the Borrower upon demand.

(f)    Notwithstanding article 1233 of the Civil Code of Peru (Legislative Decree No. 295), the obligations under any Peruvian Note shall not be extinguished even if such Peruvian Note is prejudiced under the laws of Peru due to negligence of any Lender. In case of loss, theft, partial or complete destruction or mutilation of any Peruvian Note, the relevant Lender shall be entitled to request to the Borrower by written communication certified by a notary public (carta notarial) (attaching to that effect a sworn statement indicating that such loss, theft, partial or complete destruction or mutilation shall have occurred), and the Borrower shall promptly (but in any event within ten (10) days of such notice) execute and deliver in lieu thereof a new Peruvian Note. With respect to any Peruvian Note which is mutilated or partially destroyed in the possession of such Lender, once the new Peruvian Note in respect thereof is delivered, the relevant Lender shall deliver to the Borrower the original Peruvian Note that was mutilated or partially destroyed.

(g)    Each Lender shall be entitled to have its Peruvian Note substituted, exchanged or subdivided in connection with a permitted assignment of all or any portion of such Lender’s Loans; provided that such Peruvian Note to be substituted, exchanged or subdivided shall be delivered to the Borrower.

29

(h) Upon discharge of all obligations of the Borrower under the Loans evidenced by a NY Note or a Peruvian Note, as the case may be, the Lender holding such NY Note or Peruvian Note, as the case may be, shall cancel such NY Note or Peruvian Note, as the case may be, and promptly return it or them to the Borrower.

2.05    Pro Rata Borrowings. The Borrowing of Loans under this Agreement shall be incurred from the Lenders pro rata on the basis of their Commitments. The obligations of the Lenders hereunder to make Loans are several and not joint. It is understood that no Lender shall be responsible for any default by any other Lender of its obligation to make Loans hereunder and that each Lender shall be obligated to make the Loans provided to be made by it hereunder, regardless of the failure of any other Lender to make its Loans hereunder.

2.06    Interest.

(a)    The Borrower agrees to pay interest in respect of the unpaid principal amount of each Loan from the date of Borrowing thereof (or with respect to any PIK Interest, from and including the date on which the amount of accrued but unpaid interest constituting the PIK Interest became due) until the maturity thereof (whether by acceleration or otherwise) at the Applicable Rate.

(b)    After the occurrence and during the continuance of an Event of Default, the Borrower shall pay interest on the then-outstanding principal balance of the Loans (plus any past due amounts not constituting principal) at a per annum interest rate at all times equal to the Default Rate. Accrued and unpaid interest on any amounts outstanding (including interest on past due interest) shall be due and payable upon demand.

(c)    Accrued (and theretofore unpaid) interest shall be payable, (A) quarterly in arrears on each Quarterly Payment Date, (B) on the date of any repayment or prepayment (on the amount repaid or prepaid), and (C) at maturity (whether by acceleration or otherwise) and, after such maturity, on demand.

(d)    All computations of interest for the Loans shall be made on the basis of a 360- day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid; provided that any Loan that is repaid on the same day on which it is made shall bear interest for one day; provided, further, that interest for any subsequent payment periods, that occur after the day the Loan is made, shall accrue from the immediately preceding interest payment date. Each determination by the Lenders of an amount of interest or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

(e)    On each Quarterly Payment Date prior to the one-year anniversary of the Closing Date when accrued and unpaid interest on any Loans is due and payable hereunder (such period, the “PIK Election Period”), the Borrower may elect, upon thirty (30) days’ prior written notice to the Lenders, for the aggregate amount of such accrued and unpaid interest in respect of

30

the Loans (such amount, the “PIK Interest”) to be capitalized and added to the then-outstanding aggregate principal portion thereof as of the relevant Quarterly Payment Date (such election, the “PIK Option”). Following the date of any such capitalization, such capitalized PIK Interest shall be deemed to be outstanding principal and shall accrue interest in accordance with the terms hereof. In the event that the Borrower elects the PIK Option, the PIK Interest shall be deemed to have accrued interest at the otherwise applicable interest rate plus two percent (2%) per annum.

2.07    Increased Costs, Illegality, Etc.

(a)    If any Change in Law shall: (i) impose, modify or deem applicable any reserve, liquidity requirement, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender; (ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (c) of the definition of “Excluded Taxes” and (C) Connection Income Taxes), on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves or other liabilities or capital attributable thereto; or (iii) impose on any Lender any other condition, cost or expense (other than Taxes) affecting this Agreement made by such Lender; and the result of any of the foregoing described in clause (i), (ii) or (iii) above shall be to increase the cost to such Lender of making or maintaining any Loan or of maintaining its obligation to make any such Loan, or to reduce the amount of any sum received or receivable by such Lender (whether of principal, interest or any other amount) then, upon request of such Lender, the Borrower will pay to such Lender, such additional amount or amounts as will compensate such Lender, for such additional costs incurred or reduction suffered.

(b)    If any Lender determines that any Change in Law affecting such Lender or its Applicable Lending Office, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy or liquidity, as applicable), then, from time to time, the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered. In determining such additional amounts, each Lender will use averaging and attribution methods determined in good faith by such Lender to be appropriate under the circumstances.

(c)    A certificate of a Lender setting forth the amount or amounts (in detail customarily provided by such Lender for other similarly situated borrowers as to how such amount or amounts were calculated, which description shall in no event contain any disclosure of matters deemed by such Lender to be confidential or proprietary) necessary to compensate such Lender or its holding company and, as the case may be, as specified in paragraph (a) or (b) of this Section 2.07 and delivered to the Borrower, shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within thirty (30) days after receipt thereof.

31

(d)    Failure or delay on the part of any Lender to demand compensation pursuant to the foregoing provisions of this Section 2.07 shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section 2.07 for any increased costs incurred or reductions suffered more than nine (9) months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions, and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

(e)    Each party hereto hereby agrees that the Borrower will not be responsible for any increase of amounts payable by it pursuant to this Section 2.07 as a result of any Lender voluntarily changing its Applicable Lending Office.

2.08    Change of Applicable Lending Office. (a) If any Lender requests compensation under Section 2.07(a) or (b), or requires the Borrower to pay any Indemnified Taxes or additional amounts to such Lender or any Governmental Authority for the account of such Lender pursuant to Section 4.04, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another Applicable Lending Office for funding or booking its Loans hereunder or assign its rights and obligations contemplated in this Agreement to another of its offices branches or Affiliates, if, in the good faith judgment of such Lender, such designation or assignment (a) would eliminate or reduce amounts payable pursuant to Section 2.07(a) or (b), or Section 4.04, as the case may be, in the future, and (b) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. Nothing in this Section 2.08 shall affect or postpone any of the obligations of the Borrower or the right of any Lender provided in Sections 2.07 and 4.04. The Borrower agrees to pay all reasonable and documented costs and expenses incurred by any Lender in connection with any such designation.

(b)    If the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.07(a) or (b) or Section 4.04 and, in each case, such Lender has declined or is unable to designate an Applicable Lending Office in accordance with clause (a) above, then the Borrower may, if no Default or Event of Default then exists or would exist after giving effect to such assignment, at its sole expense and effort, upon notice to such Lender, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.04), all of its interests, rights and obligations under this Agreement and the other related Credit Documents to an Assignee that shall assume such interests, rights and obligations (which Assignee may be another Lender, if another Lender accepts such assignment); provided that

(i)    such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it under this Agreement and under the other Credit Documents from the Assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

32

(ii)    in the case of any such assignment resulting from a requirement for additional payments to be made pursuant to Sections 2.07(a) or 4.04, such assignment will result in the elimination of such payments thereafter; and

(iii)    such assignment does not conflict with applicable law.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply. A Lender is not obligated to take any steps under this Section 2.08(b) if doing so might, in such Lender’s sole judgment, be prejudicial to it or be inconsistent with its regulatory position or internal policies or applicable law. No term of any Credit Document will (a) interfere with the right of any Lender to arrange its affairs (Taxes or otherwise) in whatever manner it thinks fit, (b) oblige any Lender to investigate or claim any credit, relief, remission or repayment available to it in respect of Taxes or the extent, order and manner of any claim, or (c) oblige any Lender to disclose any information relating to its affairs (Taxes or otherwise) or any computation in respect of Taxes provided.

SECTION 3.    Fees; Reductions of Commitment.

3.01    Fees.

(a)    The Borrower agrees to pay to each of the Lenders such fees as may be agreed to in writing from time to time by the Borrower and the Lenders.

(b)    All computations of fees shall be made on the basis of a 360- day year and actual days elapsed. All fees payable hereunder shall be paid on the dates due, in immediately available funds to the applicable Lenders. All fees shall be fully earned when paid and shall not be refundable under any circumstances.

3.02    Mandatory Termination of the Commitment. The Commitment shall terminate in its entirety upon the Closing Date (after giving effect to the making of any Loans on such date in accordance with the terms of this Agreement).

SECTION 4.    Prepayments; Payments; Taxes.

4.01    Voluntary Prepayments. (a) The Borrower shall have the right to prepay the Loans, without premium or penalty, in whole or in part, at any time and from time to time after the date that is eighteen (18) months after the Closing Date on the following terms and conditions: (i) the Borrower shall give each Lender prior to 12:00 Noon (New York City time) at least three (3) Business Days’ prior written notice (or telephonic notice promptly confirmed in writing) of its intent to prepay Loans; (ii) each partial prepayment of Loans pursuant to this Section 4.01 shall be in an aggregate principal amount of at least $2,000,000 and $500,000 increments in excess thereof (or such lesser amount if the outstanding amount of such Loan is less than such minimum); (iii) each prepayment pursuant to this Section 4.01 in respect of any Loans made pursuant to a Borrowing shall be applied pro rata among such Loans; and (iv) each prepayment of Loans pursuant to this Section 4.01 shall reduce the then remaining Scheduled Repayments of the Loans on a pro rata basis (based on the then remaining principal amount of each such Scheduled Repayment of the Loans after giving effect to all prior reductions thereto). Each such prepayment notice shall be irrevocable and shall be accompanied by accrued interest on the principal amount prepaid.

33

(b)    For the avoidance of doubt, any assignment by a Lender pursuant to Section 2.08 shall not be considered a voluntary prepayment by the Borrower under this Section 4.01.

4.02    Mandatory Repayments.

(a)    In addition to any other mandatory repayments pursuant to this Section 4.02, on each date set forth below (each, a “ Scheduled Repayment Date”), the Borrower shall be required to repay the full principal amount of the Loans in seven consecutive payments (such repayment amounts expressed as (i) a percentage of the aggregate initial principal amount of the Loans, plus (ii) the aggregate amount of PIK Interest that has been capitalized through the applicable Scheduled Repayment Date and remains unpaid as of such date) on each repayment date set forth below (each such repayment, as the same may be reduced as provided in Section 4.01, a “Scheduled Repayment”):

Scheduled Repayment Date	Percentage of Aggregate Initial Principal Amount  (Plus any Capitalized and Unpaid PIK Amount)
The date that is the seventh Quarterly Payment Date following the Closing Date	14.29%
The date that is the eighth Quarterly Payment Date following the Closing Date	14.29%
The date that is the ninth Quarterly Payment Date following the Closing Date	14.29%
The date that is the tenth Quarterly Payment Date following the Closing Date	14.29%
The date that is the eleventh Quarterly Payment Date following the Closing Date	14.29%
The date that is the twelfth Quarterly Payment Date following the Closing Date	14.29%
Facility Maturity Date	Remaining principal balance

(b)    In addition to any other mandatory repayments pursuant to this Section 4.02, no later than one (1) Business Day following each date on or after the Closing Date upon which the (i) Borrower or any Main Subsidiary receives any cash proceeds from any incurrence of Indebtedness (other than to the extent constituting Permitted Debt) by the Borrower or such Main Subsidiary, the Borrower shall apply an amount equal to the Net Cash Proceeds of such incurrence of Indebtedness (other than to the extent constituting Permitted Debt) as a mandatory repayment in accordance with the requirements of Section 4.02(e).

34

(c)    In addition to any other mandatory repayments pursuant to this Section 4.02, on each date on or after the Closing Date upon which Net Cash Proceeds of Asset Sales (other than proceeds otherwise invested in the business of the Borrower and/or any Main Subsidiary to purchase replacement assets within ninety (90) days of the receipt of any such Net Cash Proceeds (or within one-hundred eighty (180) days if a binding irrevocable commitment has been executed within the initial 90-day period for such purchases) that exceed $5,000,000 in any Fiscal Year of the Borrower are received by the Borrower or any Main Subsidiary, an amount equal to one-hundred percent (100%) of such excess Net Cash Proceeds from such Asset Sale shall be applied as a mandatory repayment in accordance with the requirements of Section 4.02(e).

(d)    In addition to any other mandatory repayments pursuant to this Section 4.02, on each date on or after the Closing Date upon which any Net Loss Proceeds in excess of $5,000,000 in any Fiscal Year are received by the Borrower and/or any Main Subsidiary, to the extent that such Net Loss Proceeds are not applied for Restoration or repairs in respect of the business of the Borrower or any Main Subsidiary, within ninety (90) days following the receipt of such Net Loss Proceeds (or within one-hundred eighty (180) days if a binding irrevocable commitment has been executed within the initial 90 day period in respect of the Restoration or repairs), an amount equal to one-hundred percent (100%) of such excess Net Loss Proceeds shall be applied as a mandatory repayment in accordance with the requirements of Section 4.02(e).

(e)    Each amount required to be applied pursuant to Sections 4.02(a) through (d), (f)(ii) and (g) shall be applied, in each case, to each Lender in respect of its outstanding Loans, on a pro rata basis, concurrently to repay the outstanding principal amount of Loans and any accrued interest due and payable on the prepaid amount, plus (other than in the case of repayments pursuant to Section 4.02(a)) the applicable Make-Whole Premium amount. The amount of each principal repayment of Loans made as required by Sections 4.02(b) through (d) and (g) shall be applied to reduce the then-remaining Scheduled Repayments of the Loans on a pro rata basis.

(f)    In addition to any other mandatory repayments pursuant to this Section 4.02, (i) all then-outstanding Loans shall be repaid in full on the Facility Maturity Date and (ii) unless the Required Lenders otherwise agree in writing, all then outstanding Loans shall be repaid in full on the date on which a Change of Control occurs.

(g)    In addition to any other mandatory repayments pursuant to this Section 4.02, within five (5) Business Days after the date upon which any of the Borrower or any Main Subsidiary shall have been obligated to make any reimbursements of any draws under the facilities identified in clauses (b) and (c) of the definition of Local Facility, an amount equal to such reimbursement obligations shall be applied as a mandatory repayment in accordance with the requirements of Section 4.02(e).

4.03    Method and Place of Payment.

(a)    Except as otherwise specifically provided herein, all payments under this Agreement and under any Note (whether of principal, interest, fees, or any other amounts) shall

35

be made to the Lender Account for the benefit of all of the Lenders not later than 11:00 a.m. (New York City time) on the date when due and shall be made in Dollars in immediately available funds. The Lenders hereby agree that any such funds transferred to the Lender Account in accordance with the immediately preceding sentence and otherwise by the date required hereunder for such payment will constitute, to the extent made in cash and in full, a valid and timely payment in respect of the applicable Obligations then due if the funds transferred in connection with such payment are (i) credited to the Lender Account by the day and time due within the timeframe contemplated in this Agreement and (ii) equal to the amount of the Obligations then due in full. Any funds transferred to the Lender Account in respect of any payment of any Obligation which are credited to the Lender Account after the specific time due pursuant to the terms of this Agreement on the date of payment shall be deemed by the Lenders to have been received on the next succeeding Business Day for purposes of calculating interest thereon. Whenever any payment to be made hereunder or under any other Credit Document shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day (other than in the case of a payment of principal and/or interest due on any Quarterly Repayment Date, any Scheduled Repayment Date or the Facility Maturity Date, in which case it shall be paid on the immediately preceding Business Day). If no due date is specified for the payment of any amount payable by the Borrower hereunder or under any other Credit Document, such amount shall be due and payable not later than thirty (30) days after receipt by the Borrower of written demand from any Lender for payment thereof.

(b)    All payments made by the Borrower hereunder and under any Note will be made free and clear of and without deduction for any setoff, counterclaim, recoupment or other defense.

(c)    After receipt of any request made by the Borrower prior to any applicable Quarterly Payment Date, Scheduled Repayment Date, or any applicable other date of payment, prepayment or repayment, the Lenders will deliver an invoice to the Borrower setting forth the aggregate amount of the principal, to the extent applicable, interest and/or any other amount that is due on the applicable Quarterly Payment Date, Scheduled Repayment Date, or the applicable other date of payment, prepayment or repayment; provided that the Lenders’ failure to deliver any such invoice will not obviate any of the Borrower’s payment obligations under any of the Credit Documents or invalidate any payment, prepayment or repayment that is made by the Borrower or on its behalf.

(d)    The Borrower shall cause each of the Main Subsidiaries to deposit any and all of the Dividends that are made in respect of the Equity Interests that the Borrower owns in such Main Subsidiaries (solely in accordance with the terms of the agreements: (i) in connection with Indebtedness incurred by each Main Subsidiary as of the Closing Date (without giving effect to any modification, amendment and/or supplement thereto); and (ii) governing such Equity Interests as of the Closing Date (without giving effect to any modification, amendment and/or supplement thereto)) directly into the Dividend Collection Account as and when (concurrently therewith) such Dividends are so made, such that, no later than (i) fifteen (15) Business Days prior to each Quarterly Payment Date or Scheduled Repayment Date or the Facility Maturity Date, as applicable, there are sufficient funds in Dollars on deposit in the applicable sub-account of the Dividend Collection Account available to be transferred to the Lender Account and utilized to pay all principal of and interest on the Loans that will be due and payable as of the immediately

36

succeeding Quarterly Payment Date or Scheduled Repayment Date or the Facility Maturity Date, as applicable, and (ii) three (3) Business Days prior to the date upon which any other payment, prepayment or repayment is due or intended to be made, there are sufficient funds in Dollars on deposit in the applicable sub-account of the Dividend Collection Account available to be transferred to the Lender Account and utilized to pay any amount in respect of any Obligations by the date on which such amount is due or intended to be paid, pursuant to the terms of the Trust Agreement. The Borrower’s relevant payment obligations under the Credit Documents will be discharged when the Lenders actually receive the then due and payable Dollar amount in full of such payment obligation in the Lender Account; provided that, to the extent that, in any Bankruptcy and/or pursuant to any Debtor Relief Law or otherwise, all or part of any payment with respect to any Obligations under the Credit Documents previously made shall be rescinded for any reason whatsoever, then such Obligations shall be reinstated to the extent of the amount so rescinded and, if theretofore terminated, this Agreement shall be reinstated in full force and effect and such prior termination shall not diminish, release, discharge, impair or otherwise affect such Obligations provided for in this Agreement or any other Credit Document. The Borrower shall promptly reimburse the Lenders from time to time on demand for any costs or expenses reasonably incurred by the Lenders in connection with opening and maintaining the Lender Account and in connection with transferring funds therefrom and thereto and any conversions of currency from Dollars to Soles.

4.04     Taxes.

(a)    Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower or any Main Subsidiary under any Credit Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax and to the extent the applicable Withholding Agent is the Borrower and such Withholding Agent shall not have legally and effectively assumed such Tax pursuant to Article 47 of the Peruvian Income Tax Law (Unified Text approved by Supreme Decree 179-2004-EF, as amended), then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding of Indemnified Taxes has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b)    Payment of Other Taxes by Borrower. The Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable law any Other Taxes, or at the option of any Lender timely reimburse it for the payment of any Other Taxes.

(c)    Indemnification by the Borrower. The Borrower shall indemnify each Recipient, within fifteen (15) Business Days after demand therefor, for the full amount of any Indemnified Taxes not legally and effectively assumed by the Borrower pursuant to Article 47 of the Peruvian Income Tax Law (Unified Text approved by Supreme Decree 179-2004-EF, as amended) (including Indemnified Taxes imposed or asserted on or attributable to amounts payable

37

under this Section 4.04) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by any Lender, shall be conclusive absent manifest error.

(d)    Evidence of Payments. If expressly requested by any Lender prior to or after such tax payment, as soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority pursuant to this Section 4.04, but in any case no later than fifteen (15) days after any such payment is made, the Borrower shall deliver to the Lenders the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment (or other equivalent document applicable under Peruvian law), a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Lenders.

(e)    Status of Lenders. Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Credit Document shall deliver to the Borrower, at the time or times reasonably requested by the Borrower, such properly completed and executed documentation reasonably requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower as will enable the Borrower to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation shall not be required if, in the Lender’s reasonable judgment, such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(f)    Treatment of Certain Refunds. If any party determines, in its sole discretion, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 4.04 (including by the payment of additional amounts pursuant to this Section 4.04), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this Section 4.04(f) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 4.04(f), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 4.04(f) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

38

(g)    Form of Payments. Nothing herein shall be deemed to restrict the manner in which the Borrower pays, withholds or deducts any Indemnified Taxes under Section 4.04, including by assuming such Indemnified Taxes; provided that in no event will such manner in which the Borrower pays, withholds or deducts any Indemnified Taxes have an adverse effect on any Lender.

(h)    Survival. Each party’s obligations under this Section 4.04 shall survive any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Credit Document.

(i)    Change of Applicable Lending Office. Each party hereto hereby agrees that the Borrower will not be responsible for any increase of amounts payable by it pursuant to this Section 4.04 as a result of the Lender voluntarily changing its Applicable Lending Office.

SECTION 5.    Conditions Precedent to the Borrowing of the Loans on the Closing Date.

The obligation of each Lender to make its Loan on the Closing Date is subject at the time of the making of such Loan to the satisfaction (or waiver in accordance with Section 10.12) of the following conditions:

5.01    Credit Documents. Each Credit Document, and, to the extent requested by the Initial Lender, the Notes, shall have been duly authorized, executed, and delivered by the parties hereto or thereto, as applicable, (provided that each of the Irrevocable Instruction Letters shall have been duly authorized but shall not be executed and delivered on the Closing Date) and shall be in full force and effect.

5.02    Security Interests; Lien Searches.

(a)    Subject to Sections 6.16 and 7.20, all filings, notices, consents, acknowledgements and recordings necessary to perfect the security interests in the Collateral shall have been made pursuant to the terms of the Security Documents and all related recordation, registration and/or notarial fees, charges and/or Taxes shall have been paid, and the security interests granted in favor of the Lenders will constitute valid perfected first priority Liens or, solely with respect to the pledge provided pursuant to the Second Lien Chilean Share Pledge Agreement, second priority Liens, on the Collateral, in each case free and clear of all Liens (other than Liens created pursuant to the Credit Documents and, to the extent applicable, the Adexus Financing Lien), including, (i) with respect to the Trust Agreement, the filing for registration of the Trust Agreement before the Peruvian Public Registry, (ii) with respect to the First Lien Chilean Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement, in each case, registration in Adexus’s registro de accionistas (shareholders registry), by means of a notary public’s certification, (iii) with respect to the Dividends from GMP, an annotation in the share ledger of GMP reflecting, among other things, the transfer to the trust created under the Trust Agreement (transferencia en dominio fiduciario) of the rights to receive the Collection Account Dividends from GMP and the relevant Notification requiring and directing GMP to deposit the Collection Account Dividends into the Dividend Collection Account, and (iv) with respect to the Dividends

39

from Norvial and GyM Ferrovias, an annotation in the share ledger and share certificate of each of Norvial and GyM Ferrovias reflecting, among other things, the irrevocable instruction in the relevant Irrevocable Instruction Letter requiring and directing each of Norvial and GyM Ferrovias, as applicable, to deposit the Collection Account Dividends into the Dividend Collection Account.

(b)    The Lenders shall have received copies of recent UCC lien, tax and judgment searches (to the extent applicable) in the relevant jurisdiction of formation with respect to the Borrower, the results of which show no Liens on the Collateral as of the Closing Date other than Liens created pursuant to the Credit Documents and, to the extent applicable, the Adexus Financing Lien.

5.03    Opinions of Counsel; Solvency Certificate; Closing Date Certificate; Insurance; Authorization and Authority. The Lenders shall have received:

(a)    legal opinions from each of (i) Paul Hastings LLP, New York counsel to the Borrower, in substantially the forms contemplated by Exhibit E-1, (ii) Philippi Prietocarrizosa Ferrero DU & Uria, Peruvian counsel to the Borrower, in substantially the forms contemplated by Exhibit E-2, (iii) Philippi Prietocarrizosa Ferrero DU & Uria, Chilean counsel to the Borrower, in substantially the form contemplated by Exhibit E-3, (iv) Rebaza, Alcázar & De las Casas, Peruvian counsel to the Lenders, in substantially the forms contemplated by Exhibit E- 4, and (v) Claro & Cia, Chilean counsel to the Lenders, in substantially the form contemplated by Exhibit E-5;

(b)    a solvency certificate in the form attached as Exhibit C hereto, from the Chief Financial Officer of the Borrower;

(c)    a certificate in the form attached as Exhibit D hereto, dated the Closing Date and duly executed and delivered by an Authorized Officer of the Borrower, confirming compliance with the conditions precedent set forth in Sections 5.04, 5.06, 5.10 through 5.12 and 5.14 through 5.17;

(d)    evidence of insurance maintained by the Borrower consistent with that of other companies of substantially similar size and scope of operations in the same or substantially similar businesses; and

(e)    other customary and reasonably satisfactory closing and corporate documents, resolutions, certificates, instruments and deliverables, including those evidencing due authorization and authority of the Borrower, to execute the Credit Documents to which it is a party to as of the Closing Date.

5.04    Financial Statements. The Lenders shall have received a copy, certified as true and correct by an Authorized Officer of the Borrower, of the unaudited consolidated balance sheet and related statement of income and cash flows of the Borrower for each Fiscal Quarter of the Borrower (individual and on a Consolidated basis) ended after the close of its most recent Fiscal Year.

5.05    Fees and Expenses. The Borrower shall have paid (or arrangements have been made for payment out of the proceeds of the Loans) all amounts required by the terms of the Fee Letter to be paid on or before the Closing Date. All costs, fees, expenses (including, without

40

limitation, reasonable and documented legal fees and expenses) and other compensation contemplated hereby, payable to the Lenders or otherwise payable in respect of the Transaction shall have been paid to the extent invoiced before the Closing Date and then due (or will be paid simultaneously with the proceeds of the Loans).

5.06    Representations and Warranties. The representations and warranties set forth herein and the other Credit Documents shall be true and correct in all material respects as of the Closing Date, as though made on and as of such date (and to the extent that any such representation and warranty is otherwise qualified by materiality or Material Adverse Effect, such representations and warranties shall be true and correct in all respects), with all representations and warranties that are made as of a specified date being true and correct in all material respects (and to the extent that any such representation and warranty is otherwise qualified by materiality or Material Adverse Effect, such representations and warranties shall be true and correct in all respects) as of such specified date.

5.07    Process Agent Letter. The Borrower shall have delivered a customary process agent letter to the Lenders.

5.08     Notice of Borrowing. The Lenders shall have received, in accordance with terms hereof and timeframes contemplated herein, a Notice of Borrowing, appropriately completed and duly executed by an Authorized Officer of the Borrower, requesting the funding of the Loans to be incurred on the Closing Date.

5.09    Know Your Customer. The Lenders shall have received from the Borrower, in advance of or on the Closing Date, all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act requested by the Initial Lender prior to the Closing Date.

5.10    No Default. No Default or Event of Default shall have occurred and be continuing or would result from the Borrowing of the Loans and the application of the proceeds therefrom on the Closing Date.

5.11    Consents. All material governmental and third party consents and approvals necessary to have been obtained on or prior to the Closing Date in connection with the Transaction shall have been obtained and be in full force and effect.

5.12    No Material Adverse Effect. Since December 31, 2018, there has been no Material Adverse Effect.

5.13    Lender Account. On or prior to the Closing Date, the Lender Account shall have been established and such account shall remain open and active on the Closing Date.

5.14    No Indebtedness. After giving effect to the consummation of the Transaction, the Borrower and all of the Borrower Subsidiaries shall have no outstanding preferred equity or Indebtedness, except for (a) Indebtedness incurred pursuant to, or as permitted by, the terms of this Agreement and (b) the Existing Indebtedness.

41

5.15    No Liens. After giving effect to the consummation of the Transaction, the Borrower and the Main Subsidiaries shall have no Liens upon or with respect to (a) any of their respective property, assets or revenues (other than the Collateral), except for Permitted Liens, and (b) any of the Collateral, except for Liens created pursuant to the Credit Documents and, to the extent applicable, the Adexus Financing Lien.

5.16    Maximum Leverage Ratio. The Borrower will demonstrate in form and substance satisfactory to the Lenders that, on the Closing Date and immediately after giving effect to the Transaction, the Leverage Ratio on a pro forma basis will not be greater than 3.50:1.00, which may be demonstrated by certification in the closing certificate referenced in Section 5.03(c).

5.17    Effectiveness of the Local Facility Waiver. Concurrently with the consummation of the Transaction, the prepayment amount described in the Local Facility Waiver, made in accordance with the terms of the Local Facility, shall have been deposited in the trust account described therein, and all of the security interests in and Liens on, and assignments of, the rights of the Borrower to collect the proceeds of any sale of (x) all or any material portion of the Equity Interests the Borrower owns in Adexus or (y) all or substantially all of the assets of Adexus, in each case, granted in favor of the lenders in connection therewith shall have been terminated and released.

SECTION 6.    Representations, Warranties and Agreements.

In order to induce the Lenders to enter into this Agreement and to make the Loans as provided herein, the Borrower hereby makes the following representations and warranties on the Closing Date (except as otherwise expressly noted herein) all of which shall survive the execution and delivery of this Agreement and the Notes and the making of the Loans.

6.01    Organization. (a) The Borrower is duly formed, incorporated or organized, as applicable, validly existing as a sociedad anónima abierta, and, to the extent such concept is recognized under applicable Governmental Rules, in good standing (or equivalent thereof) under the laws of Peru and (b) each of the Main Subsidiaries is duly formed, incorporated or organized, as applicable, validly existing and, to the extent such concept is recognized under applicable Governmental Rules, in good standing (or equivalent thereof) under the laws of its jurisdiction of formation, incorporation or organization, as applicable. Each of the Borrower and each Main Subsidiary is qualified to do business in every jurisdiction where the ownership, lease or operation of its properties or the conduct of its business makes such qualification necessary, except for those jurisdictions where failure to be so qualified would not reasonably be expected to have a Material Adverse Effect.

6.02    Authority. Each of the Borrower and each Main Subsidiary has all requisite organizational power and authority to own or lease its property and assets and to carry out its business as now conducted.

6.03    Due Authorization, Etc. The transactions to be consummated by the Borrower and the Main Subsidiaries (including the execution, delivery and performance of the Credit Documents to which they are a party) are within their respective corporate powers and authority and have been duly authorized by all necessary corporate action on their part, (ii) each of the

42

Borrower and each Main Subsidiary has duly executed and delivered each Credit Document to which it is a party (except for any Credit Document that should only be executed on the Closing Date, in which case such representation shall be limited to the Closing Date in respect to such Credit Document) and (iii) each Credit Document to which the Borrower and the Main Subsidiaries, as applicable, are a party constitutes the legal, valid and binding obligation of the Borrower and any such Main Subsidiary, as applicable, enforceable against it in accordance with its terms, except as such enforceability may be limited (A) by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and (B) by equitable principles relating to enforceability (regardless of whether enforcement thereof is sought in a proceeding at law or in equity).

6.04    Compliance with Law. Each of the Borrower and each Main Subsidiary is in compliance in all material respects with (a) all Governmental Rules (including Environmental Laws) applicable to it and (b) the terms of all Governmental Approvals obtained by it, in each case, in connection with the execution, delivery and performance of its obligations under the Credit Documents to which it is a party.

6.05    No Litigation. No action, suit or other proceeding by or before any arbitrator or Governmental Authority is pending and, to the best knowledge of the Borrower, no action, suit or proceeding has been threatened in writing, with respect to (a) the execution and delivery of the Credit Documents or the performance of the Borrower’s or any Main Subsidiary’s obligations thereunder and (b) the Borrower or any Main Subsidiary which, in the case of clause (b), if adversely determined, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

6.06    Title. Each of the Borrower and each Main Subsidiary has good and valid title or a valid Leasehold in or right to use all real and personal property it purports to own or lease free and clear of Liens, subject only to Permitted Liens.

6.07    No Material Adverse Effect. There has not occurred, since December 31, 2018, a Material Adverse Effect.

6.08    Governmental Approvals. All Governmental Approvals required to be obtained by (a) the Borrower and each Main Subsidiary in connection with the execution and delivery of, and performance by it of its obligations, and the exercise of its rights, under and in accordance with, the Credit Documents to which it is a party, (b) each of the Borrower and each Main Subsidiary in connection with the operation of its respective business in accordance with all material Governmental Rules (including all applicable material Environmental Laws) and (c) each of the Borrower and each Main Subsidiary in connection with the validity and enforceability of the Credit Documents to which it is a party have been obtained, to the extent required to be obtained at the date this representation is made or repeated, in each case, other than filings and recordings with applicable Governmental Authorities to be made on or after the Closing Date. With respect to any Governmental Approval not required to be obtained as of such date, neither the Borrower nor any Main Subsidiary has any reason to believe that such Governmental Approval will not be obtained in the ordinary course of business as and when needed.

43

6.09    Insurance. Each of the Borrower and each Main Subsidiary are insured with financially sound and reputable insurance companies not Affiliates of the Borrower or the applicable Main Subsidiary in such amounts, with such deductibles and covering such risks as are customarily maintained by companies in similar businesses and owning similar properties in similar localities where the Borrower or the applicable Main Subsidiary maintain their substantive places of operation.

6.10    Financial Condition. The financial statements of the Borrower and the Main Subsidiaries required to be delivered to the Lenders pursuant to the Credit Documents shall, when so delivered, have been prepared in conformity with IFRS applied on a consistent basis throughout the periods indicated and present fairly, in all material respects (except, in each case, as may be indicated in the notes therein), the financial condition and results of operations of the Borrower and the Main Subsidiaries, on a Consolidated basis, as of the date of such financial statements (subject, in the case of interim financial statements, to the absence of footnotes and year-end adjustments).

6.11    Subsidiaries. As of the Closing Date, (a) the Borrower has no Borrower Subsidiaries, except as set forth on Part A of Schedule 6.11, (b) the Borrower owns the percentage share of the Equity Interests of each Borrower Subsidiary (other than directors’ qualifying shares to the extent required by applicable law) as set forth on Part A of Schedule 6.11, and, in respect of the Main Subsidiaries, the Borrower owns such Equity Interests, free and clear of all Liens other than Liens created under the Security Documents and the Adexus Financing Lien, and (b) the Main Subsidiaries have no Subsidiaries other than as set forth on Part B of Schedule 6.11, or otherwise created or acquired in accordance with the terms of the Credit Documents to which any Main Subsidiary is a party.

6.12    Taxes. Each of the Borrower and each Main Subsidiary has timely filed or caused to be filed all income tax returns and other material tax returns and reports which are required to be filed by it under applicable law. Each of the Borrower and each Main Subsidiary has paid or caused to be paid all income Taxes and other material Taxes (including all Taxes levied upon its properties, assets, income or franchises) required to have been paid by the Borrower or any Main Subsidiary under applicable law, except such Taxes, if any, as are being contested in good faith by appropriate proceedings and for which the Borrower has established adequate reserves to the extent required under IFRS.

6.13    No Default. No Default or Event of Default has occurred and is continuing.

6.14    ERISA. None of the Borrower or any ERISA Affiliate sponsors, maintains or is obligated to contribute to any ERISA Plan or Multiemployer Plan.

6.15    No Violation. The consummation of the transactions contemplated by, and the execution, delivery and performance of, the Credit Documents by the Borrower and any Main Subsidiary do not (a) violate the Borrower’s or such Main Subsidiary’s constituent documents, (b) result in a violation or breach of, or cause acceleration, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease or any other contract, agreement or instrument binding upon the Borrower or any Main Subsidiary,

44

(c)    violate any Governmental Approval or Governmental Rules of any Governmental Authority having jurisdiction over the Borrower or any Main Subsidiary or its or their properties or (d) result in the creation of any Lien (other than Liens created pursuant to the Credit Documents and, to the extent applicable, the Adexus Financing Lien) upon any Collateral.

6.16    Security.

(a)    Upon the execution and delivery thereof by the parties thereto on the Closing Date, the First Lien Chilean Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement will be effective to create, in favor of the Lenders, legal, valid and enforceable first priority or, solely with respect to the Second Lien Chilean Share Pledge Agreement, second priority, Liens on, and security interests in, all right, title and interest of the grantors in the Collateral covered thereby, subject to no Liens (other than, to the extent applicable, the Adexus Financing Lien) and, upon the completion of due registration of the First Lien Chilean Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement in the (i) corresponding Adexus registro de accionistas (shareholders registry) by means of a notary public’s certification and (ii) Registro de Prendas sin Desplazamiento (Pledge Without Conveyance Registry) kept by the Chilean Civil Registry, all such Liens and security interests created in favor of the Lenders will be properly perfected.

(b)    Upon the execution and delivery thereof by the parties thereto on the Closing Date, the Trust Agreement will be effective to create, in favor of the Lenders, legal, valid and enforceable first priority Liens on, and security interests in, all right, title and interest of the grantors in the Collateral covered thereby, subject to no Liens (other than, to the extent applicable, the Adexus Financing Lien) and, upon (1) receipt by the relevant Main Subsidiary of the applicable Notification or Irrevocable Instruction Letter, as applicable, and (2) only with respect to the rights to collect (i) any proceeds from the sale of (x) all or any material portion of the Equity Interests the Borrower owns in Adexus, and (y) all or substantially all of the assets of Adexus, and (ii) any proceeds of any Dividends in respect of the Equity Interests the Borrower owns in Adexus, the satisfaction in full of the Condición Suspensiva Venta Adexus and the Condición Suspensiva Dividendos Adexus (each term as defined in Trust Agreement) in accordance with the terms of the Second Additional Clause and the Third Additional Clause, respectively, of the Trust Agreement, all such Liens and security interests created in favor of the Lenders will be properly perfected.

6.17    Investment Company Act. The Borrower is not required to register as an “Investment Company” within the meaning of the Investment Company Act of 1940, as amended.

6.18    Pari Passu Ranking. The obligations of the Borrower under the Credit Documents rank at least pari passu in right of payment with all other senior obligations of the Borrower, if any, whether now existing or hereafter outstanding, except for obligations mandatorily preferred pursuant to applicable law.

6.19    Intellectual Property. The Borrower or any Main Subsidiary, as the case may be, owns, or is licensed to use, all Intellectual Property material to its business, and the use thereof by the Borrower or such Main Subsidiary does not infringe upon the rights of any other Person.

45

6.20    Accuracy of Disclosure. The written information furnished by or on behalf of the Borrower or any Main Subsidiary to the Lenders and their representatives, advisors, counsel or consultants in connection with the Credit Documents or delivered thereunder did not contain, as of the date furnished, any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not materially misleading in light of the circumstances under which they were made (giving effect to all supplements and updates thereto); provided that with respect to projections, forecasts, estimates, budgets and other forward-looking statements and information that were prepared by the Borrower, the Borrower only represents that such projections, forecasts, estimates, budgets and other forward-looking information (a) were prepared in good faith upon assumptions believed by the Borrower to be reasonable at the time made, (b) fairly present, the expectations of the Borrower as to the matters covered thereby as of their date, (c) are based on good faith reasonable assumptions as to all factual and legal matters material to the estimates therein (including interest rates and costs) at the time of delivery thereof, (d) are consistent with the applicable provisions of the Credit Documents and applicable law in all material respects and (e) have been prepared on a basis substantially consistent with the financial statements referred to in Section 7.01.

6.21    Margin Regulations. No part of the proceeds of the Loans will be used for the purpose of “purchasing” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U as now in effect or for any purpose that violates or is inconsistent with the provisions of Regulation U or Regulation X.

6.22    Labor Relations. (a) There is no unfair labor practice complaint pending or, to the best knowledge of the Borrower, threatened in writing against or involving the Borrower or any Main Subsidiary, (b) there is no strike, labor dispute, slowdown or stoppage pending or, to the knowledge of the Borrower, threatened in writing against or involving the Borrower or any Main Subsidiary and (c) to the best knowledge of the Borrower, neither the Borrower nor any Main Subsidiary is party to or is bound by any collective bargaining agreement or other similar labor agreement with any labor union, or any extension or amendment thereto.

6.23    Environmental Matters.

(a)    There has been no Release of Hazardous Materials that would reasonably be expected to result in the imposition of a (i) liability to the Borrower with respect to the business of the Borrower under any Environmental Law and (ii) liability to any Main Subsidiary with respect to the business of such Main Subsidiary, which, in each case, could reasonably be expected to result in a Material Adverse Effect.

(b)    The Borrower has not received and, to the Borrower’s knowledge, no Main Subsidiary has received, a written Environmental Claim alleging a violation of or liability under any Environmental Law, liability with respect to the Release of Hazardous Materials, or liability with respect to exposure to Hazardous Materials, which, in each case, could reasonably be expected to have a Material Adverse Effect.

6.24    OFAC. (a) Neither the Borrower nor any Borrower Subsidiary or, to the knowledge of the Borrower, any director, officer, employee or agent of the Borrower or any Borrower Subsidiary (i) is currently the subject of any Sanctions, (ii) is located, organized or

46

resident in any Sanctioned Country, (iii) is a department, agency or instrumentality of, or otherwise controlled by or acting on behalf of, the government of any country that is the target of the several comprehensive economic sanctions programs administered by OFAC (31 C.F.R. Parts 500 through 598) or (iv) is included on OFAC’s Specially Designated Nationals List or the Consolidated Sanctions List maintained by OFAC, HMT’s Consolidated List of Financial Sanctions Targets or the Investment Ban List, or any similar Sanctions-related list enforced by any other relevant Sanctions authority, or is owned or controlled by any such Person or Persons described in this clause (iv).

6.25    Anti-Corruption Laws, Sanctions, and Anti-Money Laundering Laws. Except as otherwise contemplated on Schedule 6.25, (a) the Borrower and each Borrower Subsidiary, for the past five (5) years, has conducted its business in compliance with all applicable Sanctions, Anti-Corruption Laws, Anti-Terrorism and Anti-Money Laundering Laws, and regulations thereunder, and (b) has instituted and maintained policies and procedures reasonably designed to achieve compliance by the Borrower or each such Borrower Subsidiary, as applicable, with such Anti-Corruption Laws and Anti-Terrorism and Anti-Money Laundering Laws.

6.26    Use of Proceeds. The Borrower will use the proceeds of the Loans exclusively for the purposes specified under this Agreement.

6.27    Solvency. On the Closing Date, immediately after giving effect to the Transactions, the Borrower (individually) and together with the Main Subsidiaries, on a Consolidated basis, is Solvent.

6.28    Transactions with Affiliates. As of the Closing Date, neither the Borrower nor any Main Subsidiary has entered into any agreement or arrangement with any of their respective Affiliates in respect of the making or declaring of any Distributions (including, without limitation, in respect of the making or declaring of any management fees, administrative fees or other similar fees, costs or expenses) other than as set forth on Schedule 6.28.

SECTION 7.    Affirmative Covenants.

The Borrower hereby covenants and agrees that on and after the Closing Date and so long as any Loan, Note, fees or other Obligations (other than indemnities described in Section 10.13 and reimbursement obligations under Section 10.01 for which no claim has been made) shall remain unpaid or unsatisfied:

7.01    Financial Statements; Financial Certifications and Other Information.

(a)    The Borrower will furnish to the Lenders:

(i)    within one-hundred twenty (120) days after the end of each Fiscal Year of the Borrower, a copy of the audited financial statements of the Borrower and the Main Subsidiaries on a Consolidated basis as of the end of and for such Fiscal Year, setting forth in comparative form the respective audited figures for the previous Fiscal Year, if such comparative figures shall be available, prepared in accordance with IFRS and certified by an independent auditor with recognized international standing (it being understood that each of Moore Stephens,

47

BDO, Ernst & Young, Deloitte & Touché, KPMG and PricewaterhouseCoopers are deemed to have recognized international standing) (without qualification or exception as to scope of the audit or any other going concern (or similar) qualification) to the effect that the financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and the Main Subsidiaries, as applicable, as at the end of such period in accordance with IFRS consistently applied;

(ii)    within forty-five (45) days after the end of each Fiscal Quarter of the Borrower, copies of the unaudited financial statements of the Borrower and the Main Subsidiaries on a Consolidated basis as of the end of such Fiscal Quarter prepared in accordance with IFRS and stating in comparative form the respective figures for the corresponding period in the previous Fiscal Year, if such comparative figures shall be available, all certified by its chief financial officer as presenting fairly in all material respects the financial condition of the Borrower and the Main Subsidiaries on a Consolidated basis as to the end of such period and the results of its and the Main Subsidiaries’ operations as of the end of such period in accordance with IFRS consistently applied, subject to normal year-end adjustments and the absence of footnotes;

(iii)    Concurrently with the delivery of the financial statements of the Borrower referred to sub-clauses (i) and (ii) above, a certificate of an Authorized Officer of the Borrower (A) certifying whether, to the Actual Knowledge of such Authorized Officer, a Default or an Event of Default has occurred, at any time since the delivery of the prior certificate delivered pursuant to this sub-clause (iii) (or, with respect to the first such certificate, the Closing Date) and, if a Default or an Event of Default has occurred and is continuing, a statement specifying the nature thereof and any action taken or proposed to be taken with respect thereto to remedy the same, (B) if any change has occurred in IFRS or in the application thereof since the date of the most recent audited financial statements of the Borrower and the Main Subsidiaries previously delivered to the Lenders that has had a material effect on the financial statements accompanying such certificate, specifying the effect of such change and (C) including the certifications contemplated by paragraph (b) below, to the extent not otherwise contemplated in a Financial Ratio Certificate delivered as of such date;

(iv)    promptly after receipt by the Borrower, copies of any and all management letters or other similar communications and correspondence relating to management letters, received by the Borrower from any auditor of the Borrower;

(v)    no later than thirty (30) days following the first day of each Fiscal Year of the Borrower, a forecast of Dividends and other Distributions to be made by the Main Subsidiaries in respect of the Equity Interests owned therein by the Borrower in a form reasonably satisfactory to the Lenders (A) broken down by each Fiscal Quarter of such Fiscal Year and (B) prepared in reasonable detail (including, without limitation, setting forth, with appropriate discussion, the principal assumptions upon which such forecast is based);

(vi)    updates and summaries of all discussions and inquiries (whether such inquiries are in-bound or out-bound), whether formal or informal, and all material information, correspondence, agreements, documents, reports or definitive documentation or any modifications or amendments or correspondence related thereto, whether in oral or written form, including, without limitation, any commitments, offers, letters of intent or expressions of interest,

48

concerning or related to the sale of (x) all or any material portion of the Equity Interests the Borrower owns in Adexus or (y) all or substantially all of the assets of Adexus (collectively, “Adexus Sale Information”). The Borrower shall notify the Lenders of its receipt of any Adexus Sale Information, and, if written, deliver copies of the same to the Lenders, within seventy-two (72) hours of its receipt thereof. The Borrower shall notify the Lenders of any substantive discussion involving the Adexus Sale Information and deliver a reasonably detailed (satisfactory to the Lenders) summary of the same to the Lenders, within seventy-two (72) hours of the occurrence of such discussion. In addition, the Borrower shall make, and shall cause Adexus to make, its and Adexus’ management, officers, employees, professionals, agents and consultants, available to the Lenders upon request to answer any questions regarding the matters described in this clause (a)(vi); and

(vii)    promptly, such additional information regarding business, financial or corporate affairs of the Borrower or any Main Subsidiary, or compliance with the terms of the Credit Documents, as the Required Lenders may from time to time reasonably request.

(b)    The Borrower will provide to the Lenders, concurrently with the delivery of the financial statements of the Borrower referred to in sub-clauses (a)(i) and (a)(ii) above, a certificate of the chief financial officer of the Borrower in the form attached hereto as Exhibit J (each, a “Financial Ratio Certificate”) certifying as to the financial ratios contemplated by Section

8.10 for the Rolling Period most recently ended, together with applicable supporting documentation.

(c)    The Borrower will maintain its own separate books and records and its own accounts and maintain separate financial statements and file its own tax returns, in each case which are separate and apart from the books and records and accounts of any other Person; provided that the Borrower’s assets may be included in a consolidated financial statement of a direct or indirect member or shareholder of the Borrower if inclusion on such consolidated financial statement is required to comply with IFRS, but only if (i) such consolidated financial statement shall be appropriately footnoted to the effect that the Borrower’s assets are owned by the Borrower and that they are being included on the consolidated financial statement of such member or shareholder only to comply with the requirements of IFRS, and (ii) such assets shall be listed on the Borrower’s own separate balance sheet; provided, further, that the Borrower’s income may be included in any consolidated, unitary or similar tax return of a direct or indirect member or shareholder of the Borrower.

7.02    Notices of Material Events. The Borrower will, within five (5) Business Days or, in the case of clause (e) only, three (3) Business Days after it obtains Actual Knowledge thereof, deliver to the Lenders written notice of any of the following events (or, as applicable, a copy of the relevant notice or other document specified below):

(a)    any expropriation or confiscation of properties or assets of the Borrower or any Main Subsidiary, as applicable, that would reasonably be expected to result in a Material Adverse Effect;

49

(b)    any notices in writing from any Governmental Authority of any pending or threatened action, Claim or proceeding involving Environmental Laws with respect to the Borrower or any Main Subsidiary or any Release of Hazardous Materials affecting the Borrower or any Main Subsidiary, as applicable, required to be reported to a Governmental Authority under Environmental Law and, in each case, that would reasonably be expected to result in a Material Adverse Effect;

(c)    (i) any written notice to the Borrower indicating that (A) any Governmental Approval that is material to the operation and business of the Borrower and/or any Main Subsidiary will not be granted or renewed or will be granted or renewed on terms materially more burdensome than proposed or will be terminated, revoked or suspended, or any action, suit or other proceeding has been filed or commenced related to any of the foregoing or (B) any amendment, modification or supplement to any existing Governmental Approval that is material to the operation and business of the Borrower and any Main Subsidiary has occurred; or (ii) any written notice to the Borrower of the issuance of any new Governmental Approval that is material to the operation and business of the Borrower and/or any Main Subsidiary (and any material amendments, modifications or supplements to any thereof);

(d)    any dispute, litigation, investigation or proceeding which may exist at any time between the Borrower or any Main Subsidiary and any Governmental Authority or any other third party, in each case to the extent such dispute, litigation, investigation or proceeding would reasonably be expected to result in a Material Adverse Effect;

(e)    the occurrence of any Default or Event of Default under this Agreement or any other Credit Document, which shall be accompanied by a description of any action taken or proposed to be taken with respect thereto;

(f)    the filing of any actual litigation, suit or action, or the delivery to the Borrower or any Main Subsidiary of any written claim against the Borrower or any Main Subsidiary, as applicable, or the business of the Borrower or any Main Subsidiary, as applicable, in excess of $5,000,000, or which would reasonably be expected to result in a Material Adverse Effect;

(g)    any written notice of the occurrence of any event giving rise (or that could reasonably be expected to give rise) to a claim under any insurance policy with respect to the Borrower or any Main Subsidiary of more than $5,000,000, with copies of any material documents relating thereto in the possession or control of the Borrower or any Main Subsidiary, as applicable, or which would reasonably be expected to result in a Material Adverse Effect;

(h)    any Asset Sale of the Borrower with a Fair Market Value in excess of $5,000,000;

(i)    any Lien or claim against the Collateral known to the Borrower or any Main Subsidiary (other than Permitted Liens);

(j)    the Borrower or any ERISA Affiliate sponsors, maintains or becomes obligated to contribute to any ERISA Plan or Multiemployer Plan;

(k)    the occurrence of a Change of Control;

50

(l)    any other occurrence, fact or circumstance that would reasonably be expected to have a Material Adverse Effect;

(m)    any termination, revocation, annulment, or the commencement of any administrative, legal or other similar proceeding seeking the termination, revocation or annulment, of any Concession Agreement; or

(n)    promptly (i) if the Borrower or any Borrower Subsidiary or any director or officer thereof, or, to the knowledge of the Borrower, any employee, agent, Affiliate or representative of the Borrower or any Borrower Subsidiary, is a Person that is, or is owned or controlled by any Person that is (A) the subject or target of any Sanctions or (B) organized resident in a country or territory that is the subject of comprehensive Sanctions, the Borrower shall notify the Lenders and (ii) upon the request of any Lender, the Borrower shall provide or cause to be provided any information such Lender believes is reasonably necessary to be delivered to comply with its obligations under Sanctions laws.

In addition, the Borrower will promptly provide (a) any information reasonably requested by any Lender within ten (10) Business Days of such request in order for such Lender to comply with their respective internal “know your customer” or similar internal processes (applied consistently to all customers of such Lender) and (ii) with reasonable promptness, such other data and information relating to business, operations, affairs, financial condition, assets or properties of the Borrower or any Main Subsidiary as from time to time may be reasonably requested by the Lenders.

7.03    Books and Records; Inspection of Property.

(a)    The Borrower will, and will cause each Main Subsidiary to, keep proper books and records in accordance with IFRS, and will, and will cause each Main Subsidiary to, permit reasonable examinations of their respective books and records and reasonable inspections, accompanied by personnel of the Borrower or such Main Subsidiary, during normal business days and hours, as applicable, and their respective operations and businesses by the Lenders and/or its accountants or other professional advisers; provided that, the Lenders and/or their respective accountants or other professional advisers shall be permitted one physical inspection a year unless a Default or Event of Default shall have occurred and be continuing; provided, further, that such inspections will be at the sole expense of the Lenders unless a Default or an Event of Default has occurred and is continuing, in which case such inspections shall be at the sole expense of the Borrower.

(b)    At the request of the Required Lenders, the Borrower will within fifteen (15) days after the date of the delivery (or, if later, required delivery) of the quarterly and annual financial information pursuant to Sections 7.01(a) and (b), hold a conference call or teleconference, at a time and on a date selected by the Borrower and reasonably acceptable to the Required Lenders, to review the financial results of the previous Fiscal Quarter or Fiscal Year, as the case may be, and the financial condition of the Borrower and the Main Subsidiaries and the forecast of Dividends and other Distributions presented for the then-current Fiscal Year of the Borrower and the Main Subsidiaries.

51

7.04    Maintenance of Property. The Borrower will, and will cause the Main Subsidiaries to, keep all property necessary for the business of the Borrower or any Main Subsidiary in good working order, ordinary wear and tear excepted and subject to the occurrence of casualty events.

7.05    Maintenance of Company Separateness. The Borrower will, and will cause each of the Main Subsidiaries to, satisfy customary company formalities, including, as applicable, (a) the holding of regular board of directors’ and shareholders’ meetings or action by directors or shareholders without a meeting, (b) the maintenance of separate Company offices and records and (c) the maintenance of separate bank accounts in their own respective names. Neither the Borrower will, nor will it permit any Main Subsidiary to, take any action, or conduct its affairs in a manner, which is likely to result in the company existence of the Borrower or any Main Subsidiary being ignored, or in the assets and liabilities of the Borrower or any Main Subsidiary being substantively consolidated with those of any other such Person in a bankruptcy, reorganization or other insolvency proceeding.

7.06    Governmental Approvals. The Borrower will, and will cause each Main Subsidiary to, procure and maintain in full force and effect (a) all necessary approvals in respect of the Loans and the Credit Documents and (b) all approvals that are material to the operation and businesses of each of the Borrower and each Main Subsidiary (including as may be required prior to the Closing Date). The Borrower will, and will cause each Main Subsidiary to, at all times obtain, comply with and maintain in full force and effect all material Governmental Approvals necessary for the operation and maintenance of the business of the Borrower or such Main Subsidiary, as applicable.

7.07    Intellectual Property. The Borrower will, and will cause each Main Subsidiary to, maintain all Intellectual Property necessary for the operation and maintenance of the business of the Borrower and the Main Subsidiaries, as applicable.

7.08    Compliance with Laws. The Borrower will, and will cause each Main Subsidiary to, comply in all material respects with all applicable Governmental Rules (including Environmental Laws), except that the Borrower, or any Main Subsidiary, may, in good faith and by appropriate proceedings, diligently contest the validity or application of any Governmental Rules. The Borrower shall, and shall cause each Main Subsidiary to, obtain, maintain in full force and effect and comply with all permits necessary to the ownership of their respective properties or the conduct of their respective businesses.

7.09    Maintenance of Legal Status. The Borrower will, and will cause each Main Subsidiary to, at all times preserve and maintain in full force and effect its legal existence under the laws of the jurisdiction of its organization, and its qualifications to do business in each applicable jurisdiction where it operates.

7.10    Insurance. The Borrower will, and will cause each Main Subsidiary to, maintain with financially sound and reputable insurance companies not Affiliates thereof, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by persons engaged in the same or similar business in similar localities where the Borrower or the applicable Main Subsidiary maintain their substantive places of operation, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons.

52

7.11    Taxes. The Borrower will, and will cause each Main Subsidiary to, timely pay and discharge all income taxes and other material Taxes for which it is (or they are) responsible and make timely Tax filings prior to the date on which penalties, fines or interest attach thereto; provided that the Borrower or any Main Subsidiary may permit any such Tax to remain unpaid if it is being contested in good faith and the Borrower (or such Main Subsidiary) has established adequate reserves for the same to the extent required by IFRS).

7.12    Preservation of Security Interests. The Borrower will, and will cause each applicable Main Subsidiary to, create, preserve and maintain the security interests granted under the Security Documents to which it is a party in full force and effect, including the priority thereof, and take all actions to perfect the security interest therein including, but not limited to, the registration before the appropriate office of any Security Document in accordance with the terms thereof. The Borrower will, and will cause each applicable Main Subsidiary to, execute, deliver and register, file or record with each appropriate Governmental Authority further documents or instruments and cause all necessary filings to be made as necessary to create, continue and perfect the Liens of the Lenders as contemplated in the Security Documents.

7.13    Ownership of Subsidiaries. The Borrower will continue to own, directly or indirectly, the percentage share of the Equity Interests of each of its Main Subsidiaries, (other than directors’ qualifying shares to the extent required by applicable law) as set forth on Part A of Schedule 6.11.

7.14    Auditors. The Borrower will maintain independent auditors with recognized international standing (it being understood that each of Moore Stephens, BDO, Ernst & Young, Deloitte & Touché, KPMG and PricewaterhouseCoopers are deemed to have recognized international standing), and shall authorize its auditors as of any time to communicate directly with the Lenders.

7.15    Use of Proceeds.

(a)    The Borrower will use the proceeds of the Loans exclusively in order to (i) make a capital contribution to GyM in an amount not to exceed $29,800,000 (the “GyM Capital Contribution”), (ii) fund working capital needs and other corporate purposes (including the payment of fees, costs and expenses incurred in connection with the Transaction) in an amount not to exceed $1,200,000, (iii) prepay the financing obtained for the acquisition of certain Equity Interests in Adexus in an amount not to exceed $4,000,000, and (iv) if requested by the Borrower, pay any fees (other than any fees contemplated in clause (ii) above) under the Credit Documents.

(b)    No part of the Borrowing of the Loans (or the proceeds thereof) will be used to purchase or carry any Margin Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock. Neither the making of any Loan nor the use of the proceeds thereof will violate or be inconsistent with the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System. Not more than twenty-five percent (25%) of the value of the assets of the Borrower and its Subsidiaries taken as a whole is represented by Margin Stock.

53

7.16    Environmental Matters.

(a)    Promptly after any Authorized Officer of the Borrower or any Main Subsidiary obtains Actual Knowledge thereof, the Borrower shall provide notice of the following environmental matters to the extent that such environmental matters, either individually or when aggregated with all other such environmental matters, would reasonably be expected to have a Material Adverse Effect:

(i)    any pending or threatened Environmental Claim against the Borrower or any Main Subsidiary or any Real Property owned, leased or operated by the Borrower or any Main Subsidiary;

(ii)    any condition or occurrence on or arising from any Real Property owned, leased or operated by the Borrower or any Main Subsidiary that (A) results in noncompliance by the Borrower or any Main Subsidiary with any applicable Environmental Law or (B) would reasonably be expected to form the basis of an Environmental Claim against the Borrower or any Main Subsidiary or any such Real Property;

(iii)    any condition or occurrence on any Real Property owned, leased or operated by the Borrower or any Main Subsidiary that would reasonably be expected to cause such Real Property to be subject to any restrictions on the ownership, lease, occupancy, use or transferability by the Borrower or any Main Subsidiary of such Real Property under any Environmental Law; or

(iv)    the taking of any removal or remedial action to the extent required by any Environmental Law or any Governmental Authority in response to the Release or threatened Release of any Hazardous Material on any Real Property owned, leased or operated by the Borrower or any Main Subsidiary.

All such notices shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and the Borrower’s or the applicable Main Subsidiary’s response thereto.

(b)    Except as would not reasonably be expected to have a Material Adverse Effect: (i) all uses and operations of any Real Property now or hereafter owned, leased or operated by the Borrower or any Main Subsidiary shall be in compliance with all Environmental Laws and Governmental Approvals applicable to or required in respect of their respective operations and businesses; and (ii) neither the Borrower nor any Main Subsidiary will generate, use, treat, store, Release or dispose of, or permit the generation, use, treatment, storage, Release or disposal of Hazardous Materials on any Real Property now or hereafter owned, leased or operated by the Borrower or any Main Subsidiary, or transport or permit the transportation of Hazardous Materials to or from any such Real Property, except for Hazardous Materials generated, used, treated, stored, Released or disposed of at any such Real Properties in compliance in all material respects with all applicable Environmental Laws and as required in connection with the normal operation, use and maintenance of the business or operations of the Borrower or any Main Subsidiary.

7.17    Dividend Collection Account; Paying Dividends.

(a)    The Borrower will cause the Dividend Collection Account into which all the Collection Account Dividends shall be deposited to be opened and established (and thereafter maintain until the payment of all the Obligations in full in cash) pursuant to the terms of the Trust Agreement.

54

(b)    From and after the Closing Date, the Borrower will cause each Main Subsidiary to pay Dividends to the Borrower, solely in accordance with the terms of (i) the agreements, documents and/or instruments in connection with Indebtedness incurred by each Main Subsidiary as of the Closing Date (without giving effect to any modification, amendment and/or supplement thereto)), (ii) the agreements, documents and/or instruments governing the Equity Interests that the Borrower owns in such Main Subsidiary as of the Closing Date (without giving effect to any modification, amendment and/or supplement thereto)), (iii) the Trust Agreement, (iv) each of the Irrevocable Instruction Letters and (v) each of the Notifications.

7.18    Sale or Other Disposition of Adexus. The Borrower will use best efforts to sell or otherwise dispose of either (a) all of the Equity Interests that the Borrower owns in Adexus or (b) all or substantially all of the assets of Adexus and, in each case, apply the Net Cash Proceeds from such sale or other disposition in accordance with the terms of Section 4.02(c) and 4.02(e).

7.19    Ranking. The Borrower will promptly take all actions as may be necessary to ensure that the payment obligations of the Borrower under the Credit Documents will at all times rank at least pari passu in priority of payment with all other senior, unsubordinated Indebtedness of the Borrower.

7.20    Post-Closing Covenant.

(a)    Within fifteen (15) Business Days following the Closing Date (or such later date as the Lenders may agree in their sole discretion), (i) the Borrower shall have registered, or caused to be registered, with the Registro de Prendas sin Desplazamiento (Pledge Without Conveyance Registry) kept by the Chilean Civil Registry, the First Lien Chilean Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement and (ii) the Borrower shall have paid, or caused to be paid, all related recordation, registration and/or notarial fees, charges and/or Taxes.

(b)    Pursuant to the terms of the Trust Agreement, (i) the Borrower shall have completed in all respects the registration of the Trust Agreement with the Peruvian Public Registry and (ii) the Borrower shall have paid, or caused to be paid, all related recordation, registration and/or notarial fees, charges and/or Taxes.

(c)    Within (i) five (5) Business Days following the Closing Date (or such later date as the Lenders may agree in their sole discretion), the Borrower shall provide evidence to the Lenders that it has prepaid in full the financing obtained for the acquisition by the Borrower of certain Equity Interests in Adexus and (ii) thirty (30) days following the prepayment in clause (i) above (or such later date as the Lenders may agree in their sole discretion), the Borrower shall provide evidence satisfactory to the Lenders that the Adexus Financing Lien has been terminated and released.

(d)    The Borrower shall cause the Trustee to request the opening of the Dividend Collection Account within two (2) Business Days following the Closing Date (or such later date as the Lenders may agree in their sole discretion), and the Borrower shall cause the Trustee to have such account opened and become active no event later than seven (7) Business Days following the Closing Date (or such later date as the Lenders may agree in their sole discretion).

55

(e)    (i) Within one (1) Business Day after the date upon which the Dividend Collection Account is opened, the Borrower shall deliver evidence, that is satisfactory to the Lenders, that (x) the relevant Notification has been delivered by the Borrower to Adexus and (y) the Irrevocable Instruction Letters to be sent to Norvial and GyM Ferrovias and the relevant Notification to be sent to GMP have been delivered by the Trustee to the Borrower for execution, (ii) within one (1) Business Day of the delivery of each Irrevocable Instruction Letter and the relevant Notification to be sent to Norvial, GyM Ferrovias and GMP, respectively, by the Trustee to the Borrower, the Borrower shall deliver executed copies of such Irrevocable Instruction Letters and such Notification to the Trustee, (iii) within one (1) Business Day of the Trustee receiving the executed Irrevocable Instruction Letters and the executed relevant Notification from the Borrower, the Trustee shall have signed such executed Irrevocable Instruction Letters and Notification, and delivered fully-executed copies of the same to the relevant Peruvian public notary and (iv) (x) in the case of Adexus, within three (3) Business Days after the date upon which the Dividend Collection Account is opened, the Borrower shall have delivered evidence, that is satisfactory to the Lenders, of the acknowledgment of Adexus of the relevant Notification, and (y) in the case of GyM Ferrovias, GMP and Norvial, within five (5) Business Days after the date upon which the Dividend Collection Account is opened, the Borrower shall have delivered evidence, that is satisfactory to the Lenders, of the acknowledgment of each of the Irrevocable Instruction Letters and the relevant Notification and the annotations in the share ledgers of GMP, GyM Ferrovias and Norvial and the annotations in the share certificates of GMP, GyM Ferrovias and Norvial, in each case, reflecting, among other things, the respective instructions requiring and directing each of GMP, GyM Ferrovias and Norvial to deposit the Collection Account Dividends into the Dividend Collection Account.

(f)    The Borrower shall have caused each of the Condición Suspensiva Venta Adexus and the Condición Suspensiva Dividendos Adexus (each term as defined in Trust Agreement) to have been fulfilled and verified in accordance with the terms of the Trust Agreement.

SECTION 8.    Negative Covenants.

The Borrower hereby covenants and agrees that on and after the Closing Date and until the Commitments have been terminated and so long as any Loan, Note, fees or other Obligations (other than any indemnities described in Section 10.13 and reimbursement obligations under Section 10.01 for which no claim has been made) shall remain unpaid or unsatisfied:

8.01    Prohibition of Fundamental Changes; Purchase and Sale of Assets, Etc.

(a)    The Borrower will not, and will not permit any Main Subsidiary to, (i) enter into any transaction of merger or consolidation, change its form of organization or its business, split-off or liquidate, wind up or dissolve itself, or suffer any liquidation or dissolution (except that any Main Subsidiary may merge with and into the Borrower (so long as the Borrower is the surviving entity thereof) or with and into another Main Subsidiary), (ii) convey, sell, lease, assign, transfer or otherwise dispose of all or substantially all of its assets (other than as may be expressly

56

permitted pursuant to the terms of the Credit Documents and the Permitted Intellectual Property Reorganization) or (iii) purchase, lease or acquire any assets or property other than assets or property required or desirable in connection with the operation and maintenance or management of the business or which are acquired in the ordinary course of the business.

(b)    Without limitation to clause (a) above, the Borrower will not, and will not permit any Main Subsidiary to, convey, sell, lease, transfer, assign or otherwise dispose of, in one transaction or a series of related transactions (including any sale-leaseback transaction), any of its properties or assets (including any Equity Interests) if such conveyance, sale, transfer, assignment or other disposition would constitute an Asset Sale unless the Borrower complies with the mandatory redemption provisions contemplated by Section 4.02(c). The Borrower will be permitted to sell, transfer or otherwise dispose of the Equity Interests and/or the assets that it owns in Adexus so long as the Borrower complies with the mandatory redemption provisions contemplated by Section 4.02(c) and cause the release of any Lien granted pursuant to any Security Document over the Equity Interests that the Borrower owns in, or such other assets of, Adexus in connection with such disposition of the Equity Interests that the Borrower owns in, or such other assets of, Adexus.

8.02    Indebtedness. The Borrower will not, and will not permit any of its Main Subsidiaries to, create, incur, assume or permit to exist any Indebtedness, except for the following (“Permitted Debt”):

(a)    Indebtedness incurred or created under the Credit Documents;

(b)    purchase money obligations incurred by any Main Subsidiary to finance discrete items of equipment that extend to and are secured by only the equipment being financed in an aggregate principal amount outstanding not to exceed $2,000,000 at any time;

(c)    Indebtedness created in connection with any capital lease, sale-leaseback or lease-leaseback transaction in an aggregate principal amount outstanding not to exceed $2,000,000 at any time;

(d)    accrued expenses incurred, and financing of insurance premiums, in the ordinary course of business which are payable in accordance with customary practices that are not overdue by more than ninety (90) days;

(e)    customary contingent liabilities incurred in the ordinary course of business in respect of the acquisition or sale of goods, services, supplies or merchandise in the ordinary course of business, the endorsements in the ordinary course of business of negotiable instruments received in the ordinary course of business and customary indemnities provided under any of the Credit Documents;

(f)    to the extent constituting Indebtedness, Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business or other cash management services in the ordinary course of business of any Main Subsidiary;

57

(g)    to the extent constituting Indebtedness, obligations in respect of guarantees for the benefit of the Peruvian government under the terms of the Law 30737, performance bonds, bid bonds, appeal bonds, surety bonds, standby letters of credit, indemnification obligations, obligations to pay insurance premiums, take-or-pay obligations contained in supply agreements and similar obligations incurred in the ordinary course of business of the Borrower (on its own behalf or on behalf of its Subsidiaries) or any Main Subsidiary in accordance with past practice;

(h)    Indebtedness in respect of any bankers’ acceptance, warehouse receipt or similar facilities entered into in the ordinary course of business;

(i)    ordinary course obligations in respect of deposit accounts permitted hereunder and opened and maintained in the ordinary course of business;

(j)    unfunded pension fund and other employee benefit plan obligations and liabilities arising by operation of law and in the ordinary course of business of the Borrower or any Main Subsidiary, to the extent they are permitted to remain unfunded under applicable law;

(k)    Indebtedness for Taxes, assessments or governmental charges which are (i) not yet due, or which are adequately bonded or for which adequate reserves in accordance with IFRS have been made and (ii) which are being contested in good faith by appropriate proceedings diligently;

(l)    unsecured Indebtedness in respect of Hedge Agreements permitted in accordance with Section 8.13 in an aggregate principal amount outstanding not to exceed $2,000,000 at any time;

(m)    Indebtedness of GyM Ferrovias and Norvial incurred in compliance with the terms of their Existing Indebtedness as in effect on the Closing Date (without giving effect to any modifications, amendments and/or supplements thereto following the Closing Date);

(n)    Indebtedness incurred by GMP without recourse to the Borrower or any other Main Subsidiary in an amount up to $65,000,000 outstanding at any time incurred for the sole purpose of making investments in the GMP Oil Fields under GMP’s license agreements as in effect on the Closing Date (without giving effect to any modifications, amendments and/or supplements thereto following the Closing Date);

(o)    to the extent constituting Indebtedness, the GyM Capital Contribution;

(p)    the Existing Indebtedness and any refinancing Indebtedness not in excess of an amount equal to the principal amount thereof, plus the amount of reasonable transaction costs, any reasonable amount required for debt service reserve purposes or other customary reserves and customary premiums in respect thereof and required by the documentation governing the same and the sum of any reasonable consent fees or other amounts payable in connection with any liability management transaction in respect thereof incurred as a result of any refinancing of the Existing Indebtedness;

58

(q)    Indebtedness of GMP incurred in the ordinary course of business and in accordance with its past practice constituting the obligation to return or refund any purchase price payments made in advance to GMP in respect of any sale or other disposition of oil and/or gas produced by GMP and sold or otherwise disposed of to a third party purchaser (that is not an Affiliate of GMP, the Borrower or any Main Subsidiary);

(r)    Indebtedness of GMP incurred in the ordinary course of business and in accordance with its past practice in connection with the financing or refinancing entered into by Consorcio Terminales and Consorcio Terminales del Perú for the execution of their mandatory, additional or complementary investments under their operating agreements with Petroperu, so long as after giving effect to such Indebtedness the Borrower is in compliance with the Leverage Ratio on a pro forma basis; and

(s)    any other Indebtedness incurred with the prior written consent of the Required Lenders.

8.03    Liens. The Borrower will not, and will not permit any Main Subsidiary to, create, incur, assume or permit to exist any Lien upon or with respect to (a) any of its property, assets or revenues (other than the Collateral), except for Permitted Liens, and (b) any of the Collateral, except for Liens created pursuant to the Credit Documents and, to the extent applicable, the Adexus Financing Lien.

8.04    Investments. The Borrower will not, and will not permit any Main Subsidiary to, make any Investments, unless (i) no Default or Event of Default has occurred and is continuing, (ii) if such Main Subsidiary incurs or creates Indebtedness in connection with such Investments, such Indebtedness is permitted pursuant to Section 8.02, and (iii) such Investment is in Cash Equivalents or in respect of a Permitted Business. Investments in Cash Equivalents and, to the extent constituting an Investment, (i) the making of the GyM Capital Contribution by the Borrower and (ii) the Permitted Intellectual Property Reorganization, shall be an Investment permitted under this Section 8.04.

8.05    Distributions. The Borrower will not directly or indirectly, make or declare any Distributions (a) unless no Default or Event of Default shall have occurred and be continuing and (b) unless and until the aggregate outstanding principal amount of the Loans is less than or equal to $10,000,000.

8.06    Transactions with Affiliates. The Borrower will not, and will not permit any Main Subsidiary to, enter into any agreement or arrangement (including any intercompany loan) with any of its Affiliates unless (a) such transaction is entered into on terms no less favorable to the Borrower or such Main Subsidiary, than such party could obtain in a comparable arm’s-length transaction with a Person that is not an Affiliate of the Borrower or such Main Subsidiary, (b) such agreement or arrangement is approved in writing by the Required Lenders (which approval shall not be unreasonably withheld, conditioned or delayed) or (c) in connection with the Permitted Intellectual Property Reorganization; provided that (a) the Borrower shall be permitted to collect management fees in any Fiscal Year consistent with historical practice up to an aggregate amount that is equal to fifteen percent (15%) per annum more than the aggregate annual management fees set forth in the Management Agreements on the Closing Date; provided, further, that such management fees in any Fiscal Year paid to the Borrower in excess of the aggregate amount set forth in the immediately preceding proviso shall be deposited into the Dividend Collection Account; and (b) the Borrower shall be permitted to make the GyM Capital Contribution.

59

8.07    Constitutive Documents. Neither the Borrower nor any Main Subsidiary will modify its constitutive documents except to the extent that such change will not adversely affect the rights of the Lenders.

8.08    Name; Fiscal Year. Neither the Borrower nor any Main Subsidiary will change its name or its Fiscal Year, except with the prior written approval of the Lenders (not to be unreasonably conditioned, withheld or delayed).

8.09    Anti-Terrorism and Anti-Money Laundering Laws; Anti-Corruption Laws. The Borrower will not, and will not permit any Borrower Subsidiary to, (a) directly or, to its knowledge, indirectly, (i) knowingly conduct any business or engage in making or receiving any contribution of funds, goods or services to or for the benefit of any director, officer, employee or agent of the Borrower or such Borrower Subsidiary that violates any Anti-Terrorism and Anti-Money Laundering Law, (ii) knowingly deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to any Anti-Terrorism and Anti-Money Laundering Law, or (iii) knowingly engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism and Anti-Money Laundering Law (and the Borrower shall deliver to the Lenders any certification requested from time to time by any Lender in its reasonable discretion, confirming compliance with this Section 8.09) or (b) cause or permit any of the funds that are used to repay the Loans to be proceeds of unlawful activity under applicable Anti- Terrorism and Anti-Money Laundering Laws. The Borrower will not, and will not permit any Borrower Subsidiary to, (A) directly or, to its knowledge after due inquiry, indirectly, use or cause or permit the use of proceeds of the Loans in any manner which would violate Sanctions or Anti- Corruption Laws, or (B) engage in any transaction that violates any of the applicable prohibitions set forth in any Sanctions, Anti-Terrorism and Anti-Money Laundering Laws or Anti-Corruption Laws.

8.10    Financial Covenants.

(a)    Commencing with the first Quarterly Payment Date that is three (3) months or more following the Closing Date, the Borrower will not permit its Consolidated EBITDA to Consolidated Interest Expense Ratio to be less than 2.00:1.00 at any time.

(b)    The Borrower will not permit its Leverage Ratio, at any time, to be greater than 3.50:1.00.

(c)    Commencing on the twelve (12) month anniversary of the Closing Date, the Borrower will not permit, at any time, (i) the Minimum Debt Service Ratio to be less than 1.50:1.00 and (ii) (x) during the period commencing on the date that is the twelve (12) month anniversary of the Closing Date through and including the date that is the fifteen (15) month anniversary of the Closing Date, the Minimum Debt Exposure Ratio to be less than 0.35:1.00 and, (y) thereafter, the Minimum Debt Exposure Ratio to be less than 0.50:1.00.

60

8.11    Principal Place of Business. The Borrower will maintain its principal place of business in Peru. The Borrower will, and will cause each Main Subsidiary to, maintain at its principal place of business originals or copies of its principal books and records.

8.12    Conduct of Business. The Borrower will not, and will not permit any Main Subsidiary to, without the prior written consent of the Required Lenders (which shall be at their sole and absolute discretion), engage at any time in any business other than the Permitted Business and activities reasonably ancillary thereto.

8.13    Derivative Transactions. The Borrower will not, and will not permit any Main Subsidiary to, enter into any Hedge Agreement except that the Borrower and any Main Subsidiary may enter into Hedge Agreements in the ordinary course of their business and for non-speculative purposes in accordance with Section 8.02(l).

8.14    Restrictive Agreements. The Borrower will not, and will not permit any Main Subsidiary to, become subject to or permit to exist any Contractual Obligation restricting the ability of any Main Subsidiary to pay Dividends or any other Distributions with respect to its Equity Interests, except for (i) restrictions (including restrictions imposed by a corporate policy in effect as of the Closing Date (without giving effect to any modifications, amendments and/or supplements thereto following the Closing Date )) as in effect on the Closing Date and set forth on Schedule 8.14, (ii) the restrictions in the Credit Documents, and (iii) restrictions on Distributions expressly set forth in the financing documentation of any financing to be obtained by GMP for the purpose of developing and investing in the GMP Oil Fields which financing involves the utilization of revenues arising from the GMP Oil Fields as collateral security for the obligations thereunder so long as such restrictions only restrict the ability of GMP to distribute profits from the GMP Oil Fields and do not restrict Distributions from GMP utilizing any other source of revenues.

8.15    Amendments to Trust Agreement, Irrevocable Instruction Letters and Notifications. The Borrower will not terminate, amend, modify or waive (or permit any amendment, modification or other change to (pursuant to a waiver or otherwise)) (i) any of its rights under the Trust Agreement, (ii) any provision of any Irrevocable Instruction Letter or (iii) any provision of any Notification, in each case, to the extent that such termination, amendment, modification or waiver could reasonably be expected to be adverse in any respect to the Lenders.

SECTION 9.    Events of Default

Upon the occurrence and during the continuance of any of the following specified events (each, an “Event of Default”):

9.01    Payments of Principal of the Loans. The Borrower fails to pay any principal of the Loans on the date when due; or

9.02    Payments of Interest on the Loans. The Borrower fails to pay any interest on the Loans on the date when due, and such failure is not remedied within three (3) Business Days after the applicable due date therefor; or

9.03    Payments of Fees or Other Amounts. The Borrower fails to pay fees or other amounts payable under any Credit Document (other than interest, principal and Make-Whole Premium) when due and such failure is not remedied within five (5) Business Days after the applicable due date therefor; or

61

9.04    Certain Covenants. The Borrower fails to comply with (i) any affirmative covenant set forth in Section 7.02(e), 7.08, 7.09 (with respect to the Borrower and each Main Subsidiary), 7.15, 7.17, 7.19 or 7.20 or (ii) any negative covenant set forth in Section 8; or

9.05    Other Covenants. The Borrower or any Main Subsidiary fails to comply with any other covenant under this Agreement (other than those specified in Section 9.01 through 9.04 above and Sections 9.06 and 9.12 below) or any other Credit Document, in each case, unless such failure is remedied within thirty (30) days after the Borrower or such Main Subsidiary has Actual Knowledge of such failure; or

9.06    Insurance Covenant. The Borrower fails to comply with any covenant or agreement applicable to it contained in Section 7.10, unless such failure is remedied within ten (10) Business Days after the Borrower has Actual Knowledge of such failure; or

9.07    Representation and Warranties. Any representation or warranty made by the Borrower or any Main Subsidiary in any Credit Document or in any certificate or document required to be delivered thereby proves to have been incorrect in any material respect (or if qualified by “materiality”, “Material Adverse Effect” or similar language, in any respect after giving effect to such qualification) when made and, if capable of remedy, such misrepresentation shall continue unremedied for a period of more than thirty (30) days after the earlier of (i) notice of such misrepresentation having been given to the Borrower by the Lender or (ii) the Borrower having Actual Knowledge thereof; or

9.08    Credit Documents. Any Credit Document ceases (other than in accordance with its terms) to be in full force and effect, or the Borrower or any Main Subsidiary denies in writing further liability or obligation under, or otherwise contests, any Credit Document to which it is a party, in such a way as to render any material provision of any of the Credit Documents invalid or unenforceable or purports to delay the performance or observance by the Borrower or any Main Subsidiary of any of their respective obligations under any Credit Document; or

9.09    Bankruptcy, Etc. Any of the following (a “Bankruptcy”) occurs with respect to the Borrower or any Main Subsidiary: (a) commencement by the Borrower or any Main Subsidiary of any case or other proceeding (i) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition, a general assignment for the benefit of its creditors or other relief with respect to it or its debts, or (ii) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets; or (b) commencement against the Borrower or any Main Subsidiary of any case or other proceeding of a nature referred to in clause (a) above which (i) results in the entry of an order for relief or any such adjudication or appointment or (ii) remains undismissed, undischarged or shall not be stayed for a period of ninety (90) days or more; or (c) commencement against the Borrower or any Main Subsidiary of any case or other proceeding seeking issuance of a warrant of attachment, execution, distraint or similar process against all or

62

any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed pending appeal within ninety (90) days from the entry thereof; (d) the Borrower or any Main Subsidiary takes any action in furtherance of, or indicating its consent to (or fails to take any action and such failure is deemed to indicate consent to), approval of, or acquiescence in, any of the acts set forth in clause (a), (b) or (c) above; or (e) the Borrower or any Main Subsidiary shall admit in writing its inability to pay its debts as they become due; or

9.10    Judgments. A final and non-appealable judgment is rendered against the Borrower or any Main Subsidiary by one or more Governmental Authorities of competent jurisdiction or a decision of a judicial or arbitral tribunal of competent jurisdiction, for the payment of money in an aggregate amount in excess of $10,000,000, and such judgment shall not have been paid, discharged, vacated or remains unsatisfied without any procurement of a stay of execution within thirty (30) days or otherwise a bond or other security shall not have been posted; or

9.11    Security Documents; Irrevocable Instruction Letters; Notifications. (i) except as expressly contemplated by its terms or arising in connection with any action taken by the Lenders, any of the Security Documents fails to provide the Lenders an effective perfected Lien on all or any portion of the Collateral (with the priority contemplated under the Security Documents) (subject to Liens arising by operation of law) that is not remedied within fifteen (15) Business Days after (A) the Borrower having Actual Knowledge thereof or (B) the Borrower shall have received notice from any of the Lenders, (ii) except in accordance with its terms, any Security Document, any Irrevocable Instruction Letter or any Notification fails to be in full force and effect or (iii) the Borrower contests in writing further liability or obligation under any such Security Document, Irrevocable Instruction Letter or any Notification; or

9.12    Governmental Approvals. Any Governmental Approval material to the business of the Borrower or any Main Subsidiary or their ability to comply with their obligations under the Credit Documents is lost, not obtained or failed to be maintained, and (a) such loss or failure continues to exist for more than forty-five (45) days or such Governmental Approval is not replaced within forty-five (45) days (unless the business of the Borrower or such Main Subsidiary or a material part thereof cannot continue to operate without such Governmental Approval) and (b) such loss or failure could reasonably be expected to result in a Material Adverse Effect; or

9.13    Condemnation; Suspension of Payments or Moratorium. (a) Any government or Governmental Authority shall Condemn all of the Equity Interests (or a material portion thereof) of the Borrower or any Main Subsidiary or the business, property or assets (or, in each case, a material portion thereof) of the Borrower or any Main Subsidiary or (b) any government or Governmental Authority in Peru shall (i) declare a general suspension of payments or a moratorium on the payment of any Indebtedness of the Borrower or any Main Subsidiary incurred in respect of the Loans or (ii) impose any limitation (including, without limitation, any exchange control regulation) on the ability of the Borrower or any Main Subsidiary to repay principal of, pay interest on, any Make-Whole Premium in respect of the Loans, or any fees, or to transfer funds abroad, and in each case, such suspension, moratorium or limitation has continued for forty-five (45) consecutive days; or

63

9.14    Default under Other Agreements. (a) Any other Indebtedness of the Borrower (other than the Loans) or any Borrower Subsidiary with an aggregate principal amount outstanding in excess of $10,000,000 shall have been declared immediately due and payable prior to its scheduled maturity or (b) the Borrower or any Main Subsidiary fails to make a payment in respect of any such Indebtedness, the aggregate outstanding principal amount of which Indebtedness exceeds $10,000,000, as of such time, when such payment becomes due and owing (after giving effect to the passage of any relevant grace or cure period in respect thereof);

the Required Lenders may, (i) by notice to the Borrower, declare the Commitments of the Required Lenders hereunder to be terminated, whereupon the same will forthwith terminate; (ii) by notice to the Borrower and subject to automatic acceleration upon a Bankruptcy of the Borrower, to declare the entire unpaid principal amount of the Loans (together with all accrued and unpaid interest thereon and any other amount then due under the Credit Documents) to be forthwith due and payable, whereupon such amounts will become and be forthwith due and payable, without presentment, demand, protest, or notice of any kind, except as expressly provided herein, all of which are hereby expressly waived by the Borrower; and/or (iii) foreclose on any or all of the Collateral in accordance with the Security Documents and applicable law and/or proceed to enforce any or all remedies available to the Lenders pursuant to such Security Documents or otherwise under applicable law. Notwithstanding the foregoing, if the Event of Default set forth in Section 9.09 above occurs with respect to the Borrower, the actions described in clauses (i) and (ii) above, will be deemed to have occurred automatically and without notice.

No Lender may, except in accordance with the terms of this Agreement, (i) directly enforce any security interest created or evidenced by any Security Document or require any other Lender to enforce any such security interest, (ii) directly sue for or institute any creditor’s process (including an injunction, garnishment, execution or levy, whether before or after judgment) in respect of any Obligation (whether or not for the payment of money) owing to it under or in respect of any Credit Document, (iii) directly take any step for the winding-up, administration of or dissolution of, or any insolvency proceeding in relation to, the Borrower, or for a voluntary arrangement, scheme of arrangement or other analogous step in relation to the Borrower, or (iv) directly apply for any order for an injunction or specific performance in respect of the Borrower in relation to any of the Credit Documents.

SECTION 10.    Miscellaneous.

10.01    Payment of Expenses, Etc.

(a)    The Borrower hereby agrees to: (i) whether or not the Transaction herein contemplated is consummated, pay all reasonable and documented out-of-pocket costs and expenses of the Lenders (including the reasonable fees and disbursements of Gibson, Dunn & Crutcher LLP and the Lenders’ local counsel, due diligence costs and advisors and consultants fees and disbursements) in connection with the negotiation, preparation, execution, and delivery of this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein and any amendment, waiver or consent relating hereto or thereto; (ii) pay upon demand all reasonable and documented out-of-pocket costs and expenses incurred by any Lender in connection with (A) the exercise, enforcement or protection of any of its rights in connection with this Agreement (including its rights under this Section) and the other Credit Documents and

64

the documents and instruments referred to herein and therein or in connection with the Loans, (B) the custody, preservation, use or operation of, or the sale of, collection from or other realization upon, any of the Collateral or (C) any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a “work-out” or pursuant to any insolvency or bankruptcy proceedings (including, in each case, the reasonable and documented fees and disbursements of counsel and consultants for the Lenders); provided, however, that the Borrower shall not be responsible for the payment of any fees, costs, or other liabilities arising out of any dispute between or among the Lenders, and their respective Affiliates to the extent, and only to the extent, that such dispute does not arise out of any alleged failure of the Borrower or any Main Subsidiary to perform their obligations under the Credit Documents; and (iii) indemnify each Lender, each Lender’s Related Parties and (without duplication) each of their respective officers, directors, employees, representatives, agents, attorneys-in-fact, affiliates, trustees and investment and other advisors (each, an “Indemnified Person”) from, and hold each of them harmless against, any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs, expenses and disbursements (including reasonable and documented attorneys’ and consultants’ fees, costs and disbursements) incurred by, imposed on or assessed against any of them by any Person (including the Borrower or any Main Subsidiary), as a result of, or arising out of, or in any way related to, or by reason of, (A) the preparation, execution, delivery or performance of this Agreement, any other Credit Document or any agreement or instrument contemplated hereby or thereby, or the transactions contemplated hereby or thereby, or any action taken or omitted by any such Indemnified Person in connection with any of the foregoing, including with respect to the exercise by any Lender of its respective rights or remedies under this Agreement or any Credit Document to which it is a party, the performance or non-performance by the Borrower or any Main Subsidiary of its obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (B) any Loan or the use or proposed use of the proceeds therefrom, (C) any actual or alleged presence or Release of Hazardous Materials on or from any Real Property owned, leased or operated by the Borrower or any Borrower Subsidiary or any actual or alleged violation of Environmental Law or Environmental Claim related in any way to the Borrower or any Borrower Subsidiary or (D) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any Main Subsidiary, and regardless of whether any Indemnified Person is a party thereto, including the reasonable and documented fees, costs and disbursements of counsel and other consultants incurred in connection with any such claim, litigation, investigation or proceeding (but excluding any losses, liabilities, claims, damages or expenses to the extent incurred (1) by reason of the gross negligence or willful misconduct of the Indemnified Person to be indemnified or any of such Indemnified Person’s controlled Affiliates or any of its or their respective directors, officers, employees, agents, representatives or controlling Persons (in each case, as determined by a court of competent jurisdiction in a final and non-appealable decision) acting at the direction of such Indemnified Person in connection with the Transaction or (2) in connection with a dispute between or among the Indemnified Persons or from a claim of any Indemnified Person against another Indemnified Person, unless such claims arise from the gross negligence or willful misconduct of such Indemnified Person (in each case, to the extent finally determined by a court of competent jurisdiction in a final non-appealable judgment)) which in either case is not the result of an act or omission of the Borrower or any of its Affiliates or Subsidiaries). To the extent that the undertaking to indemnify, pay or hold harmless any Indemnified Person set forth in the preceding

65

sentence may be unenforceable because it is violative of any law or public policy, the Borrower shall make the maximum contribution to the payment and satisfaction of each of the indemnified liabilities which is permissible under applicable law. This Section 10.01 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

(b)    To the full extent permitted by applicable law, each of the parties hereto shall not assert, and hereby waives, any claim against any Indemnified Person or any other party hereto, on any theory of liability, for special, indirect, consequential or incidental damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any other Credit Document or any agreement or instrument contemplated hereby or thereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. No Indemnified Person shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby, except to the extent the liability of such Indemnified Person results from such Indemnified Person’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).

10.02    Right of Setoff. In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, if an Event of Default has occurred and is continuing, each Lender and each of its Affiliates are hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, without presentment, demand, protest or other notice of any kind to the Borrower or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) and any other Indebtedness at any time held or owing by such Lender (including by branches and agencies of such Lender or such Affiliate wherever located) to or for the credit or the account of the Borrower against and on account of the Obligations and liabilities of the Borrower to such Lender or its Affiliates under this Agreement or under any of the other Credit Documents, including all interests in Obligations purchased by such Lender pursuant to Section 10.04(b), and all other claims of any nature or description arising out of or connected with this Agreement or any other Credit Document, irrespective of whether or not Lender or such Affiliate shall have made any demand hereunder and although said Obligations, liabilities or claims, or any of them, shall be contingent or unmatured. The Lenders agree to notify the Borrower promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of or entitlement to such setoff and application.

10.03    Notices.

(a)    Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including electronic image scan transmission (e.g., “.pdf” via electronic mail)) and delivered by hand or overnight courier service, mailed by certified or registered mail or sent by electronic image scan transmission (e.g., “.pdf” via electronic mail): if to the Borrower, at the address specified opposite its name on Schedule 10.03(a) or in the other relevant Credit Documents; if to any Lender, at its address

66

specified on Schedule 1.01(a); as to the Borrower, at such other address as shall be designated by such party in a written notice to the other parties hereto and, as to each Lender, at such other address as shall be designated by such Lender in a written notice to the Borrower.

(b)    Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Lenders; provided that the foregoing shall not apply to notices pursuant to Sections 2, 3 or 4 unless otherwise agreed by the Required Lenders and the applicable Lender. Each of the Lenders and the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

(c)    All such notices and communications shall, when sent by hand or overnight courier service, be effective on the date of receipt if delivered by hand or overnight courier service or sent by electronic means or, when mailed, be effective on the date five (5) Business Days after dispatch by certified or registered mail, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 10.03 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 10.03.

(d)    As between the Borrower and the Lenders, unless any Lender otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received sending such communication (unless the sender shall have received a notice that such message was not deliverable (it being understood and agreed that this shall not include an “out of office” or similar notice), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient.

10.04    Benefit of Agreement; Assignments; Participations.

(a)    This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and permitted assigns of the parties hereto; provided, however, that the Borrower may not assign or transfer any of its rights, obligations or interest hereunder without the prior written consent of the Lenders. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Related Parties of each of the Lenders and each other Indemnified Person) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)    Although any Lender may at any time sell participations to any Person without the consent of, or notice to, the Borrower or any other Lender (each such Person to which a participation is sold, a “Participant”) in its rights hereunder, and such Lender shall remain a “Lender” for all purposes hereunder and the Participant shall not constitute a “Lender” hereunder,

67

and (i) the Borrower and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and any other Credit Document and to approve any amendment, modification or waiver of any provision of this Agreement or any other Credit Document; provided, further, that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver to the extent such amendment, modification or waiver would (i) extend the final scheduled maturity of any Loan or Note in which such Participant is participating, or reduce the rate or extend the time of payment of interest or fees thereon (except in connection with a waiver of applicability of any post-default increase in interest rates) or reduce the principal amount thereof (it being understood that any waiver of interest accruing at the default rate, amendment or modification to the financial definitions in this Agreement or to Section 10.07 shall not constitute a reduction in the rate of interest or fees payable hereunder), or increase the amount of the Participant’s participation over the amount thereof then in effect (it being understood that a waiver of (A) any Default or Event of Default or (B) a mandatory prepayment of the Loans, shall not constitute a change in the terms of such participation, and that an increase in any Loan shall be permitted without the consent of any Participant if the Participant’s participation is not increased as a result thereof), (ii) consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement or (iii) release all or substantially all of the Collateral under all of the Security Documents (except as expressly provided in the Credit Documents) supporting the Loans hereunder in which such Participant is participating. In the case of any such participation, except as otherwise set forth in Section 10.04(e), the Participant shall not have any rights under this Agreement or any of the other Credit Documents (the Participant’s rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the Participant relating thereto) and all amounts payable by the Borrower hereunder shall be determined as if such Lender had not sold such participation.

(c)    Any Lender may at any time and from time to time assign, with notice to the other Lenders, and, unless a Default or an Event of Default shall have occurred and be continuing, subject to the prior written consent of the Borrower (such consent not to be unreasonably withheld, conditioned or delayed), to one or more other banks, finance companies, insurance companies, pension funds or any other financial institutions or funds (whether a corporation, partnership or other entity) or any other Persons (other than an individual) (each, an “Assignee”) all or a portion of its Commitments and rights and outstanding Obligations (or, if the Closing Date has occurred and the Commitments have terminated, rights and outstanding Obligations) hereunder and under the Notes and each such Assignee shall become a party to this Agreement as a Lender by execution of an Assignment and Assumption Agreement; provided that (A) upon the surrender of the relevant NY Notes by the assigning Lender (or, upon such assigning Lender’s indemnifying the Borrower for any lost NY Note pursuant to a customary indemnification agreement) new NY Notes will be issued, at the Borrower’s reasonable expense, to such new Lender and to the assigning Lender upon the request of such new Lender or assigning Lender, such new Notes to be in conformity with the requirements of Section 2.04 (with appropriate modifications) to the extent needed to reflect the revised Commitments (if the Closing Date has not yet occurred and the Commitments have not yet terminated) and/or outstanding Loans (and, for the avoidance of doubt, in the case of the Peruvian Notes, Section 10.04(f) will be

68

applicable in connection with any such assignment), (B) no such transfer or assignment will be effective until recorded by the Initial Lender on the Register pursuant to Section 10.15, (C) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement and (D) if the assignment occurs prior to the Closing Date, the Assignee shall have an international credit rating in respect of its unsecured Dollar-denominated long-term debt equal to at least “BBB-” or higher by S&P or Fitch or “Baa3” from Moody’s, or in the case of an insurance company, an international credit rating in respect of its unsecured Dollar-denominated long-term debt equal to at least “A-” from A.M. Best; provided that, no assignments shall be permitted to a Defaulting Lender or any subsidiary thereof. To the extent of any assignment pursuant to this Section 10.04(b), the assigning Lender shall be relieved of its obligations hereunder with respect to its assigned Commitments (if the Closing Date has not yet occurred and the Commitments have not yet terminated) and outstanding Loans. To the extent that an assignment of all or any portion of a Lender’s Commitments and rights and outstanding Obligations (or, if the Closing Date has occurred and the Commitments have terminated, rights and outstanding Obligations) pursuant to this Section 10.04(b) would, at the time of such assignment, result in (A) increased costs under Section 2.07 from those being charged by the respective assigning Lender prior to such assignment or (B) increased payments under Section 4.04 from those that would have been required to be made to the respective assigning Lender prior to such assignment, then the Borrower shall not, absent a Default or an Event of Default that has occurred and be continuing, and if the Borrower consented in writing to such participation, be obligated to pay such increased costs or make such increased payments (although the Borrower, in accordance with and pursuant to the other provisions of this Agreement, shall be obligated to pay any other increased costs of the type described above resulting from changes in law after the date of the respective assignment). No assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

(d)    Nothing in this Agreement shall prevent or prohibit any Lender from pledging its Loans and Notes hereunder to a Federal Reserve Bank or any other central banking authority in support of borrowings made by such Lender from such Federal Reserve Bank or other central banking authority, and any Lender which is a fund may pledge all or any portion of its Loans and Notes to its trustee or to a collateral agent providing credit or credit support to such Lender in support of its obligations to such trustee, such collateral agent or a holder of such obligations, as the case may be. No pledge pursuant to this clause (c) shall release the pledging Lender from any of its obligations hereunder, or alter, diminish or change any of its obligations under the Credit Documents, or substitute any such pledgee or assignee for such Lender as a party hereto or shall otherwise affect or alter the obligations or rights of the Borrower or create any privity between the Borrower and any such pledgee or assignee.

(e)    Any Lender which assigns all of its Commitments (if the Closing Date has not yet occurred and the Commitments have not yet terminated) and/or Loans hereunder in accordance with Section 10.04(b) shall cease to constitute a “Lender” hereunder, except with respect to indemnification provisions under this Agreement (including Sections 2.07, 4.04, 10.01 and 10.06), which shall survive as to such assigning Lender (with respect to matters occurring prior to such assignment); and (ii) in the case of the Initial Lender, with respect to its agreement to maintain the Register pursuant to Section 10.15 (unless another Lender has agreed to assume such obligation).

69

(f)    The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.07 and 4.04 (subject to the requirements and limitations therein (it being understood that the documentation required under Section 4.04(e) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment; provided that such Participant shall not be entitled to receive any greater payment under Section 2.07 or 4.04, with respect to any participation, than its participating Lender would have been entitled to receive, as applicable to assignments and any voluntary changes in the Applicable Lending Office, except to the extent such entitlement to receive a greater payments results from a Change in Law after the Participant acquired the applicable participation. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Credit Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s or Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Credit Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. No Lender (other than the Lender selling the applicable participation) shall have any responsibility for maintaining a Participant Register in respect to the applicable participation sold.

(g)    In case of an assignment by any Lender of all of its Loans, such Lender shall, at its option, (i) execute and deliver to the relevant assignee, an endorsement (endoso) of its Peruvian Note to such assignee, together with its corresponding instructions letter, or (ii) request the Borrower to execute a new Peruvian Note, in which case the Borrower shall execute and deliver to such assignee a new Peruvian Note duly completed and evidencing the assigned Loans, with its corresponding instructions letter, promptly after receipt of request thereof from such Lender and concurrently with the consummation of such assignment; provided that such new Peruvian Note shall be delivered in exchange for any existing Peruvian Notes evidencing the assigned Loans. In case of an assignment by any Lender of only a portion of its Loans, the Borrower shall, not later than ten (10) Business Days after receipt of a notice from any Lender that such Lender intends to assign a portion of its Loans, concurrently with the consummation of such assignment execute and deliver to the relevant assignee a new Peruvian Note with its corresponding instructions letter, duly completed and evidencing the Loans assigned to such assignee.

10.05    No Waiver; Remedies Cumulative. No failure or delay on the part of any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between the Borrower and any Lender shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights, powers and remedies herein or in any other Credit Document expressly provided are cumulative and not exclusive of any rights, powers or remedies which any Lender would otherwise have. No notice to or demand on the Borrower in any case

70

shall entitle the Borrower to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of any Lender to any other or further action in any circumstances without notice or demand.

10.06    Payments Pro Rata.

(a)    Each of the Lenders agrees that, if it should receive any amount hereunder (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or banker’s lien, by counterclaim or cross action, by the enforcement of any right under the Credit Documents, or otherwise), which is applicable to the payment of the principal of, or interest on, the Loans of a sum which with respect to the related sum or sums received by other Lenders is in a greater proportion than the total of such Obligation then owed and due to such Lender bears to the total of such Obligation then owed and due to all of the Lenders immediately prior to such receipt, then such Lender receiving such excess payment shall purchase for cash without recourse or warranty from the other Lenders an interest in the Obligations of the Borrower to such Lenders in such amount as shall result in a proportional participation by all the Lenders in such amount; provided that if all or any portion of such excess amount is thereafter recovered from such Lenders, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.

(b)    Each of the Lenders agrees that, if it should receive any amount hereunder (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or banker’s lien, by counterclaim or cross action, by the enforcement of any right under the Credit Documents, or otherwise), which is applicable to the payment of the principal of, or interest on, the Loans of a sum which with respect to the related sum or sums received by other Lenders is in a greater proportion than the total of such Obligation then owed and due that such Lender bears to the total of such Obligation then owed and due to all of the Lenders immediately prior to such receipt, then such Lender receiving such excess payment shall purchase for cash without recourse or warranty from the other Lenders an interest in the Obligations of the Borrower to such Lenders in such amount as shall result in a proportional participation by all the Lenders in such amount; provided that if all or any portion of such excess amount is thereafter recovered from such Lenders, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.

10.07    Calculations; Computations. The financial statements to be furnished to the Lenders pursuant hereto shall be made and prepared in accordance with IFRS consistently applied throughout the periods involved (except as set forth in the notes thereto or as otherwise disclosed in writing by the Borrower to the Lenders); provided that, notwithstanding anything to the contrary contained herein, all such financial statements shall be prepared, and all financial covenants contained herein or in any other Credit Document shall be calculated, in each case, without giving effect to any election under IFRS 9 (or any similar accounting principle) permitting a Person to value its financial liabilities at the fair value thereof.

71

10.08    GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL.

(a)    THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION) (EXCEPT IN THE CASE OF THE TRUST AGREEMENT, EACH IRREVOCABLE INSTRUCTION LETTER, EACH NOTIFICATION, THE PERUVIAN NOTES AND, WITH RESPECT TO THE PERUVIAN NOTES, THEIR CORRESPONDING LETTERS OF INSTRUCTIONS, WHICH ARE GOVERNED UNDER THE LAWS OF PERU, THE FIRST LIEN CHILEAN SHARE PLEDGE AGREEMENT AND THE SECOND LIEN CHILEAN SHARE PLEDGE AGREEMENT, WHICH ARE GOVERNED UNDER THE LAWS OF CHILE, AND ANY OTHER SECURITY DOCUMENTS EXPRESSLY STATED THEREIN TO BE GOVERNED UNDER THE LAWS OF ANY OTHER JURISDICTION).

(b)    ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER THE BORROWER AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION OVER THE BORROWER. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. THE BORROWER AGREES (i) NOT TO INITIATE OR COMMENCE ANY LAWSUIT, ARBITRATION OR OTHER LEGAL PROCEEDINGS AGAINST THE LENDERS OR DIRECTLY OR INDIRECTLY RELATING TO THE CREDIT DOCUMENTS OTHER THAN A PROCEEDING IN THE COURTS REFERENCED IN THE FIRST SENTENCE OF THIS SECTION 10.08(b) AND (ii) TO POST AN APPEAL BOND IN AN AMOUNT EQUAL TO $1,000,000 IN CONNECTION WITH ANY APPEAL OF A JUDGMENT ASCERTAINING THE OCCURRENCE OF AN EVENT OF DEFAULT UNDER THIS AGREEMENT.

(c)    THE BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS COGENCY GLOBAL INC., WITH OFFICES ON THE CLOSING DATE AT 10 E. 40TH STREET, 10TH FLOOR, NEW YORK, NEW YORK 10016, AS ITS AGENT TO RECEIVE ON ITS BEHALF AND ON BEHALF OF ITS PROPERTY, SERVICE OF COPIES OF ANY SUMMONS AND COMPLAINT AND OTHER PROCESS THAT MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING AND AGREES TO APPOINT A SUCCESSOR PROCESS AGENT IN NEW YORK, NEW YORK (WHICH

72

SUCCESSOR PROCESS AGENT SHALL ACCEPT SUCH APPOINTMENT IN WRITING) PROMPTLY PRIOR TO, OR CONCURRENTLY WITH, THE TERMINATION FOR ANY REASON OF THE APPOINTMENT OF THE INITIAL OR ANY SUCCESSOR PROCESS AGENT OF THE FAILURE OTHERWISE OF SUCH APPOINTMENT TO BE EFFECTIVE. SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY HAND DELIVERY OR REGISTERED MAIL UPON ANY SUCH PROCESS AGENT SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR PROCEEDING BROUGHT IN ANY OF THE AFOREMENTIONED COURTS. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY OTHER JURISDICTION.

(d)    THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER MAY BE ENTITLED TO THE BENEFIT OF ANY PROVISION OF LAW REQUIRING THE LENDERS IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN A COURT IN PERU ARISING OUT OF OR IN CONNECTION WITH ANY CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, TO POST SECURITY FOR LITIGATION COSTS OR OTHERWISE POST A PERFORMANCE BOND OR GUARANTY, OR TO TAKE ANY SIMILAR ACTION, THE BORROWER HEREBY WAIVES SUCH BENEFIT, IN EACH CASE TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED UNDER THE LAWS OF PERU.

(e)    EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SUBSECTION.

73

(f)    IN THE EVENT THAT THE BORROWER DIRECTLY OR INDIRECTLY ASSERTS OR PERMITS THE PURSUIT OF A CLAIM, RIGHT, CAUSE OF ACTION OR SUIT IN VIOLATION OF THIS SECTION 10.08, THE BORROWER SHALL, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BE LIABLE TO AND SHALL INDEMNIFY (WITHOUT DUPLICATION OF ANY OTHER INDEMNITY OBLIGATIONS CONTAINED HEREIN) THE LENDERS FOR, ALL EXPENSES AND DAMAGES ASSOCIATED WITH SUCH RIGHT, CLAIM, SUIT OR CAUSE OF ACTION INCLUDING, BUT NOT LIMITED TO, ATTORNEY’S FEES AND COSTS INCURRED BY ANY LENDER IN OPPOSITION (AND ALL ATTORNEY’S FEES AND COSTS INCURRED BY AFFILIATES, OWNERS AND EMPLOYEES OF SUCH LENDER). IN CONNECTION WITH SUCH OBLIGATION TO INDEMNIFY, THE BORROWER SHALL ADVANCE TO THE APPLICABLE LENDER ITS LEGAL FEES, COSTS, AND EXPENSES ASSOCIATED WITH THE DEFENSE THEREOF WITHIN TEN (10) BUSINESS DAYS OF THE REQUEST BY SUCH LENDER FOR SUCH ADVANCEMENT.

10.09    Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by email or other electronic image scan transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

10.10    Effectiveness; Integration. This Agreement shall become effective on the Closing Date, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. From and after the Closing Date, this Agreement, the other Credit Documents and any written agreement between the Borrower and the Initial Lender in connection with this Transaction in respect of any indemnity or reimbursement between such parties shall constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.

10.11    Headings Descriptive. The headings of the several sections and subsections and the Table of Contents of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

10.12    Amendment or Waiver; Etc.

(a)    Except as otherwise expressly provided herein, neither this Agreement nor any Security Document nor any terms hereof or thereof may be amended, restated, supplemented, modified, waived, discharged or terminated unless such amendment, restatement, supplement, modification, waiver, discharge or termination is in writing signed by the Borrower or any applicable Main Subsidiary party thereto and the Required Lenders (although additional parties may be added to (and annexes may be modified to) reflect such additions), and the Main Subsidiaries may be released from the Security Documents in accordance with the provisions hereof and thereof without the consent of the Required Lenders); provided, in each case, that no such amendment, restatement, supplement, modification, waiver, discharge or termination shall: (i) extend, reinstate or increase the Commitment of any Lender without the written consent of such

74

Lender (it being understood that waivers or modifications of conditions precedent, covenants, Defaults or Events of Default or of a mandatory reduction in the Commitment or a mandatory repayment of Loans shall not constitute an increase of the Commitment of any Lender, and that an increase in the available portion of any Commitment of any Lender shall not constitute an increase of the Commitment of such Lender); (ii) extend the scheduled payments of any amortization (including at final maturity) or times for payment of any principal or the Loans, or postpone any Quarterly Payment Date or any date fixed by this Agreement for any payments of interest or fees due to the Lenders (or any of them), or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender directly affected thereby; (iii) reduce the principal of, or the rate of interest specified therein on, any Loan, or any fees or other amounts payable thereunder or change the currency of any Loan, without the written consent of each Lender directly affected thereby (provided that waiver of any requirement to pay interest at the default rate shall not constitute a reduction in the rate of interest); (iv) alter the pro rata sharing of payments required by the Section 10.06 without the written consent of each affected Lender; (v) change any provision set forth under this Section 10.12 or the definition of “Required Lenders” or any other provision herein specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender; or(vi) release any material part of the Collateral (other than the release of Collateral pursuant to the express provisions of any Security Document), in each case, without the written consent of each Lender. No waiver of any provision of this Agreement or consent to any departure therefrom shall in any event be effective unless the same shall be permitted pursuant to this Section 10.12, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.

10.13    Survival. All covenants set forth herein, including in Sections 2.07, 4.04, 10.01, 10.03, 10.06, 10.07, 10.08, 10.13 and 10.16, shall survive the consummation of the Transaction contemplated hereby, the repayment of the Loans and the expiration or termination of the Commitments or the termination (with respect to matters occurring prior to such termination) of this Agreement or any other Credit Document or any provision hereof or thereof.

10.14    Domicile of Loans. Subject to Section 2.07, each Lender may transfer and carry its Loans at, to or for the account of any office, Subsidiary or Affiliate of such Lender.

10.15    Register. The Borrower hereby designates the Initial Lender to serve as its non-fiduciary agent, solely for purposes of this Section 10.15, to maintain a register (the “Register”) at its offices located at 20 Dayton Avenue, Greenwich, CT 06830 on which it will record the Applicable Lending Office of each Lender, Commitments from time to time of each of the Lenders, the Loans made by each of the Lenders (and stated interest thereon) and each repayment in respect of the principal amount of the Loans of each Lender. Failure to make any such recordation, or any error in such recordation, shall not affect the Borrower’s obligations in respect of such Loans. With respect to any Lender, the transfer of the Commitments of such Lender and the rights to the principal of, and interest on, any Loan made pursuant to such Commitments shall not be effective until such transfer is recorded on the Register maintained by the Initial Lender with respect to ownership of such Commitments and Loans and prior to such recordation all amounts owing to the transferor with respect to such Commitments and Loans shall remain owing to the transferor. The registration of assignment or transfer of all or part of any Commitments and Loans shall be recorded by the Initial Lender on the Register upon and only upon the acceptance by the Initial

75

Lender of a properly executed and delivered Assignment and Assumption Agreement pursuant to Section 10.04(b). Upon such acceptance and recordation, the assignee specified therein shall be treated as a Lender for all purposes of this Agreement. Coincident with the delivery of such an Assignment and Assumption Agreement to the Initial Lender for acceptance and registration of assignment or transfer of all or part of a Loan, or as soon thereafter as practicable, the assigning or transferor Lender shall surrender the Note (if any) evidencing such Loan, and thereupon one or more new Notes in the same aggregate principal amount shall be issued to the assigning or transferor Lender and/or the new Lender at the request of any such Lender. The entries in the Register shall be conclusive absent manifest error, and the Borrower and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

10.16    Confidentiality.

(a)    Subject to the provisions of clause (b) of this Section 10.16, each Lender agrees that it will not disclose, without the prior consent of the Borrower, (other than to its Related Parties or auditors or to another Lender; provided that such Persons shall be subject to the provisions of this Section 10.16 to the same extent as such Lender) any information with respect to the Borrower or any Main Subsidiary or their business which is now or in the future furnished pursuant to this Agreement or any other Credit Document; provided that any Lender may disclose any such information (i) as has become (A) generally available to the public other than by virtue of a breach of this Section 10.16(a) by such Lender or (B) available to any Lender or any of their respective Affiliates on a non-confidential basis from a source other than the Borrower or any Main Subsidiary (except as a result of a breach of a confidentiality obligation known to such Lender or respective Affiliates), (ii) as may be required or requested by, or submitted to, any municipal, state, Federal or foreign regulatory body having or claiming to have jurisdiction over such Lender or to the Federal Reserve Board or the Federal Deposit Insurance Corporation, other central banks or similar organizations (whether in the United States or elsewhere) or their successors (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (iii) as may be required or appropriate in respect to any summons or subpoena or in connection with any investigation, litigation, arbitration or other proceeding (including in connection with the exercise of any remedies hereunder or under any other Credit Document or any action or proceeding relating to this Agreement or any other Credit Document or the enforcement of rights hereunder or thereunder) (and such Person will provide prompt notice to the Borrower thereof to the extent not prohibited by applicable law), (iv) in order to comply with any law, order, regulation or ruling applicable to such Lender, (v) to any other Lender, (vi) to any direct or indirect contractual counterparty (or its Related Party) in any swap, hedge or similar agreement (or to any such contractual counterparty’s professional advisor), so long as such contractual counterparty (or such professional advisor) agrees to be bound by the provisions of this Section 10.16 and (vii) to any prospective or actual transferee or participant in connection with any contemplated transfer or participation of any of the Loans, Notes or Commitments or any interest therein by such Lender; provided that such prospective transferee agrees to be bound by the confidentiality provisions contained in this Section 10.16. Any Person required to maintain the confidentiality of information as provided in this Section 10.16 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such information as such Person would accord to its own confidential information.

76

(b)    The Borrower hereby acknowledges and agrees that each Lender may share with any of its Affiliates, and such Affiliates may share with such Lender, any information related to the Borrower or any Main Subsidiary (including any non-public customer information regarding the creditworthiness the Borrower or any Main Subsidiary); provided that such Persons shall be subject to the provisions of this Section 10.16 to the same extent as such Lender.

(c)    In addition, the Lenders may disclose the existence of this Agreement and customary information about this Agreement to market data collectors, similar service providers to the lending industry and service providers to the Lenders in connection with the administration of this Agreement, the other Credit Documents, and the Commitments.

10.17    PATRIOT Act. Each Lender that is subject to the requirements of the PATRIOT Act hereby notifies the Borrower that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies the Borrower and the Main Subsidiaries, which information includes the names and addresses of the Borrower and the Main Subsidiaries and other information that will allow such Lender to identify the Borrower and the Main Subsidiaries in accordance with the PATRIOT Act.

10.18    Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Credit Document, the interest paid or agreed to be paid under the Credit Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable law (the “Maximum Rate”). If any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

10.19    Lender Action. Each Lender agrees that it shall not take or institute any actions or proceedings, judicial or otherwise, for any right or remedy against the Borrower or any other obligor under any of the Credit Documents (including the exercise of any right of setoff, rights on account of any banker’s lien or similar claim or other rights of self-help), or institute any actions or proceedings, or otherwise commence any remedial procedures, with respect to any Collateral or any other property of the Borrower, unless expressly provided for herein or in any other Credit Document, without the prior written consent of the Required Lenders and the Borrower.

10.20    Severability. Any provision of any Credit Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

77

10.21    No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Credit Document), the Borrower acknowledges: (a) (i) the arranging and other services regarding this Agreement provided by the Lenders are arm’s-length commercial transactions between the Borrower, each Main Subsidiary and their respective Affiliates, on the one hand, and the Lenders, on the other hand, (ii) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Credit Documents; (b) (i) each of the Lenders, is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower, any Main Subsidiary or any of their respective Affiliates, or any other Person and (ii) none of the Lenders has any obligation to the Borrower, any Main Subsidiary or any of their respective Affiliates with respect to the Transaction contemplated hereby except those obligations expressly set forth herein and in the other Credit Documents; and (c) the Lenders, and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower, the Main Subsidiaries and their respective Affiliates, and none of the Lenders has any obligation to disclose any of such interests to the Borrower, any Main Subsidiary or any of their respective Affiliates. Without prejudice to the obligations of the Lenders hereunder, to the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against the Lenders with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

10.22    Payments Set Aside. To the extent that any payment by or on behalf of the Borrower is made to any Lender (including pursuant to any settlement entered into by such Lender in its discretion), or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred.

10.23    Acknowledgement and Consent to Bail-in of EEA Financial Institutions. Notwithstanding anything to the contrary in any Credit Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Credit Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)    the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

(b)    the effects of any Bail-in Action on any such liability, including, if applicable:

(i)    a reduction in full or in part or cancellation of any such liability;

78

(ii)    a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Credit Document; or

(iii)    the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

[Signature Pages Follow]

79

IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Agreement as of the date first above written.

GRAÑA Y MONTERO S.A.A., as the Borrower
By:	/s/ Luis Diaz Olivero
Name:	Luis Diaz Olivero
Title:	CEO
By:	/s/ Jonica Miloslavich Hart
Name:	Jonica Miloslavich Hart
Title:	CFO

[Signature Page to the Loan Agreement]

CS PERU INFRASTRUCTURE HOLDINGS LLC, as the Initial Lender
By:	/s/ Gustavo Ferraro
	Name:    Gustavo Ferraro
	Title:      Authorized Officer
By:	/s/ Joshua M. O’Melia
	Name:    Joshua M. O’Melia
	Title:      Authorized Officer

[Signature Page to Loan Agreement]

SCHEDULE 1.01(a)

LENDER’S ADDRESS

Lender	Address
CS Peru Infrastructure Holdings LLC	c/o Gramercy Funds Management LLC
	20 Dayton Avenue
	Greenwich, CT 06830
	Attention: Tomás Serantes, Josh O’Melia, and Marc Zelina
	Telephone: (203) 552-1900
	Email: tserantes@gramercy.com
	jomelia@gramercy.com
	mzelina@gramercy.com

SCHEDULE 1.01(b)

EXISTING INDEBTEDNESS

• The two outstanding bond issuances set forth in the table below:

Bondholders	Issuer	Type of Financing	Total Amount	Outstanding amount as of Closing Date	Currency	Execution Date	Issuance Date	Date of Final Repayment
Bondholders (represented by Scotiabank Peru)	Norvial	Bonds	S/365,000,000	S/316,169,945	Soles	July, 2015	July 23, 2015	January 25, 2027
Bondholders (represented by Citibank N.A.)	GyM Ferrovias	Bonds	S/629,000,000	S/560,424,025	Soles	February, 2015	February 10, 2015	November 25, 2039

• Parent Guarantee granted by the Borrower in favor of Alstom Transporte, S.A., Sociedad Unipersonal (“Alstom”), pursuant to that certain public deed, dated as of July 21, 2016, pursuant to which the Borrower guaranteed the following obligations for the benefit of Alstom: (i) the outstanding payment obligations of GyM Ferrovias under the purchase and commissioning documents of the expansion of the Lima Metro; and (ii) the outstanding reimbursement obligations of GyM Ferrovias of any amounts paid under the performance bonds issued by Alstom to the Ministry of Transport and Communication in the event that the issued and outstanding performance bonds are executed by the beneficiary of such bonds for a reason that is not regulated under the terms of such bonds, which obligations aggregate to the amount of $41,191,064.80.

• Standby letters of credit issued or to be issued for the account of the Borrower and GyM, as the case may be, to serve as letters of credit, bonds or similar instruments in connection with the project related to the Line 1 Concession Agreement and Via Expresa Sur as referred to in clauses (a)(iii), (b) and (c) of the definition of Local Facility.

• In the event a resolution of the Peruvian government determines that the Borrower is obligated to pay a reparación civil due to corruption acts against the Peruvian government in two public-private projects and “club de la construcción” projects pursuant to the terms of the Law No. 30737, all such payment obligations to the Peruvian government to the extent such obligations constitute Indebtedness.

• Promissory Notes issued by the Borrower representing contingent obligations of the Borrower up to an aggregate amount of $4,350,000 in respect of certain working capital obligations of Adexus Perú S.A. and Adexus.

• Reimbursement Agreement, dated August 23, 2017, entered into by and between the Borrower, as reimbursing party, and Mizuho Bank, Ltd., as beneficiary, in respect of certain swap transactions, for an amount of approximately $1,000,000 (calculated as its exposure at 91% confidence).

• Reimbursement Agreement, dated August 23, 2017, entered into by and between the Borrower, as reimbursing party, and Sumitomo Mitsui Banking Corporation, as beneficiary, in respect of certain swap transactions, for an amount of approximately $1,000,000 (calculated as its exposure at 91% confidence).

• Credit Agreement, dated September 19, 2008, between GMP, as borrower, and Citibank, N.A., as creditor, pursuant to which Citibank, N.A. has made a revolving line of credit of up to $4,395,000 available to GMP for working capital purposes.

• Uncapped Indemnity Agreement (Contrato de Indemnidad), dated May 17, 2016, between the Borrower and Liberty Mutual Insurance Company (“Liberty Mutual”), in respect of (i) bonds (carta fianza), (ii) reinsurance contracts (contrato de reaseguro), (iii) reimbursement agreements of surety bonds or insurance policies (contrato de respaldo de cualquier naturaleza de una póliza de cacución o póliza de seguros), (iv) commitment, acknowledgment or other reinsurance obligations (compromise, reconocimiento u otra obligación de reaseguro) and (v) the continuation, extension, amendment, modification, increase, reduction, renewal or substitution of any of the aforementioned documents includes, but is not limited to, any bond (fianza) issued by Liberty Mutual or any of its affiliates and any indemnity or guarantee (including bonds (fianzas)) issued by Liberty Mutual in connection with the foregoing, in each case, issued pursuant to the request of the Borrower.

Capitalized terms used herein, unless otherwise defined herein, have the meanings assigned to them in the Loan Agreement, dated as of July 31, 2019, between Graña y Montero S.A.A., as Borrower, and CS Peru Infrastructure Holdings LLC, as Initial Lender.

SCHEDULE 1.01(c)

EXISTING LIENS

No.	Property	Type of Lien	Indebtedness Secured by Lien	Currency
1	10,034,813 Class “A” shares owned by the Borrower in Norvial	Pledge	•  Agreement: Share Pledge Agreement (“Participación Mínima” – Class A Shares), dated June 18, 2015, among the Borrower and JJC Contratistas Generales S.A., as pledgors, Scotiabank Peru S.A.A., as Collateral Agent, with the participation of Norvial. •  Secured obligations: The repayment of the bonds issued by Norvial within a Bond Program (“Primer Programa de bonos Corporativos Norvial”) up to S/365,000,000.00, in order to finance the second phase of the Ancon Huacho Pativilca highway located in Panamericana Norte.	Soles
2	25,026,250 Class “A” Shares and 50’052,500 Class “B” Shares, owned by the Borrower in GyM Ferrovias	Pledge	•  Agreement: Share Pledge Agreement, dated February 9, 2015, among the Borrower and Ferrovías Participaciones S.A., as pledgors, Citibank N.A. as Indenture Trustee, with the participation of GyM Ferrovias, as issuer, and Citibank del Perú S.A., as Collateral Agent. •  Secured obligations: Payment of principal, interest, and amounts in respect of obligations under the Series 2039 Notes issued by GyM Ferrovias, which were offered in accordance with Regulation S under the U.S. Securities Act of 1933 and other “Senior Secured Debt” as defined in the Indenture, dated February 10, 2015, between GyM Ferrovias, as Issuer, and Citibank N.A., as Indenture Trustee.	Soles
3	Rights over the Concession Agreement entered into by GyM Ferrovias and the Ministry of Transport and Communication for the operation of the Line 1 of the Lima Metro	Trust	•  Agreement: Trust Agreement, dated January 26, 2015, among GyM Ferrovias and CONCAR S.A., as settlors, and Citibank del Perú S.A., as Trustee, as amended. •  Secured obligations: Payment of principal, interest, among and other amounts in respect of obligations under the Series 2039 Notes issued by GyM Ferrovias, which were offered in accordance with Regulation S under the U.S. Securities Act of 1933 and other “Senior Secured Debt” as defined in the Indenture, dated February 10, 2015 between GyM Ferrovias, as Issuer, and Citibank N.A., as Indenture Trustee.	Soles

4	11,500,000 Class B Shares and 11,500,000, Class C Shares owned by the Borrower in Concesionaria La Chira S.A.	Pledge	•  Agreement: Share Pledge Agreement, dated February 12, 2012, among the Borrower and Acciona Agua S.A., as pledgors, and the Trust “La Chira”, as Allowed Creditor, with the participation of Concesionaria La Chira S.A. •  Secured obligations: Maintaining in full force and effect the irrevocable power granted by Concesionaria la Chira S.A. to Continental Sociedad Titulizadora S.A., until the total amount of the RPICAOs issued in the financing of “La Chira Project” (construction of a waste water treatment plant) have been fully paid.	Soles
5	Net proceeds cash flows from the sale of CAM, Adexus and Almonte	Trust	•  Agreement: Trust Agreement, dated October 18, 2017 •  Secured obligations: the Local Facility. (the prepayment amount described in the Local Facility Waiver, made in accordance with the terms of the Local Facility, shall have been deposited in the trust account described therein)	Dollars/Soles
6	Land/facility where the Gas Plant of GMP is located	Mortgages	•  Mortgage Agreements dated September 12, 2008 and August 27, 2012. •  Secured obligations: The outstanding obligations incurred in connection with a corporate financing of GMP by Citibank N.A., as described in the eighth (8th) bullet of Schedule 1.01(b)	Dollars

Capitalized terms used herein, unless otherwise defined herein, have the meanings assigned to them in the Loan Agreement, dated as of July 31, 2019, between Graña y Montero S.A.A., as Borrower, and CS Peru Infrastructure Holdings LLC, as Initial Lender.

SCHEDULE 6.11

BORROWER SUBSIDIARIES AND OWNERSHIP PERCENTAGES

PART A

		Propiedad del Grupo de la Epmresa
Ruc	Denominación Social	Con Dcho Voto (%)			Sin Dcho Voto (%)		Total		País
20261898706	ADEXUS PERU S.A.		99.99			0		99.99	PERU
96580060-3	ADEXUS S.A.		99.99			0		99.99	CHILE
20566106184	AGENERA S.A.C.		100			0		100	PERU
20601700078	BILLETERA ELECTRONICA DE TRANSPORTE LIMA S.A.C - (company in process of being liquidated)		100			0		100	PERU
20388101971	COMPAÑIA AMERICANA DE MULTISERVICIOS DEL PERU S.A.		100			0		100	PERU
20343443961	CONCAR S.A.		100			0		100	PERU
20515121201	CONCESION CANCHAQUE S.A.C.		100			0		100	PERU
20451550561	CONCESIONARIA LA CHIRA SOCIEDAD ANONIMA		50	1		0		50	PERU
20551816754	CONCESIONARIA VIA EXPRESA SUR S.A.		100			0		100	PERU
20109453057	ECOTEC S.A.C.		99.99			0		99.99	PERU
20100154057	G Y M S.A.		98.23			0		98.23	PERU
20600817559	GENERACION ELECTRICA DEL CENTRO S.A.C. - GECENSAC		99.99			0		99.99	PERU
20566568048	GENERACION ELECTRICA DEL NORTE S.A.C. - GENOR S.A.C.		89.25			0		89.25	PERU
20381443087	QUALYS S.A.		100			0		100	PERU
20100356270	GMI S A INGENIEROS CONSULTORES		89.41			0		89.41	PERU

¹  While this entity is not a “Subsidiary”, such entity is treated by the Borrower as part of its economic group.

20378313105	GMVBS S.A.	50	2	0	50	PERU
20100153832	GRANA Y MONTERO PETROLERA S.A.	95		0	95	PERU
0285676023	GRAÑA Y MONTERO CONSTRUCCIONES Y MONTAJES	99.98		0	99.98	BOLIVIA
76.239.142-2	GYM CHILE SPA	100		0	100	CHILE
9005237711	GYM COLOMBIA S.A.S.	66.20		0	66.20	COLOMBIA
20543011976	GYM FERROVIAS S.A.	75		0	75	PERU
20555587440	GYM OPERACIONES INTERNACIONALES SOCIEDAD ANONIMA CERRADA	100		0	100	PERU
20298081556	INMOBILIARIA ALMONTE S.A.C.	50.44		0	50.44	PERU
20602617212	ALMONTE 2 S.A.C.	50.45		0	50.45	PERU
20603320825	INVERSIONES EN CONCESIONES S.A.C.	100		0	100	PERU
In process of being registered	INVERSIONES EN INFRAESTRUCTURA DE TRANSPORTES S.A.C.	100		0	100	PERU
20107951254	INMOBILIARIA GOLD S.A.	73.19		0	73.19	PERU
20100811490	INMOBILIARIA O.P.Q. S.A.C.	99.34		0	99.34	PERU
77.969.840-8	INVERSIONES Y CONSTRUCCION GYM LTDA	100		0	100	CHILE
20265690361	LARCO MAR S.A.	79.66		0	79.66	PERU
20231926161	LAS LOMAS S.A.C.	100		0	100	PERU
890312765-4	MORELCO S.A.S.	70		0	70	COLOMBIA
20600703499	NEGOCIOS DE GAS SOCIEDAD ANONIMA - NEGOCIOS DE GAS S.A.	99.99		0	99.99	PERU
20505377142	NORVIAL S.A.	50.10		0	50.10	PERU
20536751662	PROMOTORA LARCO MAR S.A.	42.80	3	0	42.80	PERU
20339226475	PROMOTORES ASOCIADOS DE INMOBILIARIAS S.A.	100		0	100	PERU
20339225312	PROYECTOS INMOBILIARIOS CONSULTORES S.A.	92.42		0	92.42	PERU

²  While this entity is not a “Subsidiary”, such entity is treated by the Borrower as part of its economic group.

³  While this entity is not a “Subsidiary”, such entity is treated by the Borrower as part of its economic group.

20600032691	RECAUDO LIMA S.A.	96.757		0	96.757	PERU
20280111130	SERVICIOS SELVA IQUITOS S.A.	99.99		0	99.99	PERU
20517216241	SURVIAL S.A.	100		0	100	PERU
76.136.076-0	VIAL Y VIVES - DSD S.A.	80.79		0	80.79	CHILE
20493040643	VIVA G Y M S.A.	99.54		0	99.54	PERU
20524577853	OILTANKING ANDINA SERVICES S.A.C.	50	4	0	50	PERU

PART B

		Propiedad del Grupo de la Epmresa
Ruc	Denominación Social	Con Dcho Voto (%)			Sin Dcho Voto (%)		Total		País
20261898706	ADEXUS PERU S.A.		99.99			0		99.99	PERU
20524577853	OILTANKING ANDINA SERVICES S.A.C.		50	5		0		50	PERU

Capitalized terms used herein, unless otherwise defined herein, have the meanings assigned to them in the Loan Agreement, dated as of July 31, 2019, between Graña y Montero S.A.A., as Borrower, and CS Peru Infrastructure Holdings LLC, as Initial Lender.

⁴  While this entity is not a “Subsidiary”, such entity is treated by the Borrower as part of its economic group.

⁵  While this entity is not a “Subsidiary”, such entity is treated by the Borrower as part of its economic group.

SCHEDULE 6.25

ANTI-CORRUPTION LAWS, SANCTIONS AND ANTI-MONEY LAUNDERING LAWS

1. Investigations of the applicable Governmental Authorities in Peru relating to the Private-Public Project of IIRSA (Interoceanic Highway).

2. Investigations of the applicable Governmental Authorities in Peru relating to the construction of Tranches 1 and 2 of Line 1 of the Lima Metro.

3. Investigations of the applicable Governmental Authorities in Peru relating to the “Club de la Construcción” (Construction Club) involving certain corruption acts for the granting of certain construction and operation services in respect of the Peruvian highways or roads.

Capitalized terms used herein, unless otherwise defined herein, have the meanings assigned to them in the Loan Agreement, dated as of July 31, 2019, between Graña y Montero S.A.A., as Borrower, and CS Peru Infrastructure Holdings LLC, as Initial Lender.

SCHEDULE 6.28

TRANSACTIONS WITH AFFILIATES

1. Service Agreement in connection with the rendering of administrative, financing, accounting and legal services, dated December 1, 2016, among the Borrower, Acciona Agua S.A. and Concesionaria La Chira S.A.

2. Service Agreement in connection with the rendering of management, strategy and functional services, dated January 1, 2018, between the Borrower and Morelco S.A.S.

3. Service Agreement in connection with the management, strategy and functional services, dated January 1, 2018, between the Borrower and Survial S.A.

4. Service Agreement in connection with the management, strategy and functional services, dated January 1, 2018, between the Borrower and GMP.

5. Service Agreement in connection with the management, strategy and functional services, dated January 1, 2018, between the Borrower and Concesión Canchaque S.A.C.

6. Service Agreement in connection with the management, strategy and functional services, dated January 1, 2018, between the Borrower and Vial y Vives – DSD S.A.

7. Service Agreement in connection with the management, strategy and functional services, dated January 1, 2018, between the Borrower and Viva GyM S.A.

8. Service Agreement in connection with the management, strategy and functional services, dated January 1, 2018, between the Borrower and CONCAR S.A.

9. Service Agreement in connection with the management, strategy and functional services, dated January 1, 2018, between the Borrower and GMI S.A. Ingenieros Consultores.

10. Service Agreement in connection to the management, strategy and functional services, dated January 1, 2018, between the Borrower and GyM.

11. Management Agreement dated January 1, 2017, between the Borrower and GyM Ferrovias.

12. Service Agreement in connection with the redering of training services (Academia), dated January 1, 2018, between the Borrower and GyM Ferrovias.

13. Service Agreement in connection with the rendering of support and technical management services, dated December 21, 2018, between the Borrower and GyM Ferrovias.

14. Service Agreement in connection with strategy and functional services, dated December 21, 2018, between the Borrower and GyM Ferrovias.

15. Service Agreement in connection with strategy and functional services, dated December 21, 2018, between the Borrower and GMP.

16. Service Agreement in connection with strategy and functional services, dated December 21, 2018, between the Borrower and GMI S.A. Ingenieros Consultores.

17. Service Framework Agreement, dated February 1, 2019, between the Borrower and Qualys S.A.

18. Borrower’s corporate dividends policy approved on March 26, 2013 (https://investorrelations.granaymontero.com.pe/es/corporate-governance/introduction).

Capitalized terms used herein, unless otherwise defined herein, have the meanings assigned to them in the Loan Agreement, dated as of July 31, 2019, between Graña y Montero S.A.A., as Borrower, and CS Peru Infrastructure Holdings LLC, as Initial Lender.

SCHEDULE 8.14

RESTRICTIVE AGREEMENTS

1. Borrower’s corporate dividends policy approved on March 26, 2013 (https://investorrelations.granaymontero.com.pe/es/corporate-governance/introduction).

Capitalized terms used herein, unless otherwise defined herein, have the meanings assigned to them in the Loan Agreement, dated as of July 31, 2019, between Graña y Montero S.A.A., as Borrower, and CS Peru Infrastructure Holdings LLC, as Initial Lender.

SCHEDULE 10.03(a)

BORROWER’S ADDRESS

Borrower’s Address:

Name and Title of Contact: Mónica Miloslavich Hart – Chief Financial Officer

Name of Company: Graña Y Montero S.A.A.

Address: Av. Paseo de la República 4675, Surquillo, Lima, Perú

Phone: +511 213-6565 (Ext. 6571)

Email Address: mmiloslavich@gym.com.pe

Contact for invoices:

Name and Title of Contact: Mónica Miloslavich Hart – Chief Financial Officer ; Elena Bustamante – Administration Manager

Name of Company: Graña Y Montero S.A.A.

Address: Av. Paseo de la República 4675, Surquillo, Lima, Perú

Phone: +511 213-6565 (Ext. 6571)

Email Address: mmiloslavich@gym.com.pe; ebustamante@gym.com.pe

With copies to (optional):

Name and Title of Contact: Elena Bustamante – Administration Manager; Fredy Chalco Aguilar – Head of Corporate Finance

Name of Company: Graña Y Montero S.A.A.

Address: Av. Paseo de la República 4675, Surquillo, Lima, Perú

Phone: +511 213-6565 (Ext 6578)

Email Address: ebustamante@gym.com.pe; fchalco@gym.com.pe

Exhibit A

FORM OF NOTICE OF BORROWING

NOTICE OF BORROWING

[Date]

CS Peru Infrastructure Holdings LLC,

as Initial Lender

c/o Gramercy Funds Management LLC

20 Dayton Avenue

Greenwich, CT 06830

Attention: Tomás Serantes, Ross Rosen and Joshua O’Melia

Ladies and Gentlemen:

The undersigned, Graña y Montero S.A.A. (the “Borrower”), refers to the Loan Agreement, dated on or about July 31, 2019 (as amended, restated, amended and restated, modified and/or supplemented from time to time, the “Loan Agreement”, the capitalized terms defined therein being used herein as therein defined), between the Borrower, you, as Initial Lender, and the other Lenders from time to time party thereto (each, a “Lender” and collectively, the “Lenders”), and hereby gives you notice, irrevocably (subject to Section 2.07), pursuant to Section 2.02 of the Loan Agreement, that the undersigned hereby requests a Borrowing under the Loan Agreement, and in that connection sets forth below the information relating to such Borrowing (the “Proposed Borrowing”) as required by Section 2.02 of the Loan Agreement:

(i) The Business Day of the Proposed Borrowing is _________ __, ____.¹

(ii) The aggregate principal amount of the Proposed Borrowing is $__________.

Very truly yours,

GRAÑA Y MONTERO S.A.A.

By:                                                                                  

Name:

Title:

¹  Shall be a Business Day and the Closing Date. A notice shall be deemed to have been given on a certain day only if given before 11:00 a.m. (New York City time) on such day (or such later time as may be agreed by the Lenders).

Exhibit B-1

FORM OF NY NOTE

NOTE

$__________ New York, NY

_________ __, ____

FOR VALUE RECEIVED, the undersigned, GRAÑA Y MONTERO S.A.A., a Peruvian sociedad anónima abierta (the “Borrower”), hereby promises to pay to [LENDER NAME] or its registered assigns (the “ Lender”), in lawful money of the United States of America in immediately available funds, to the Lender’s account, on the Facility Maturity Date or on such earlier date as may be required by the terms of the Loan Agreement (as defined below), the principal sum of __________ DOLLARS ($__________) or, if less, the unpaid principal amount of all Loans made by the Lender pursuant to the Loan Agreement, payable at such times and in such amounts as are specified in the Loan Agreement.

The Borrower also promises to pay interest on the unpaid principal amount of each Loan made by the Lender in like money at said office from the date hereof until paid at the rates and at the times provided in Section 2.06 of the Loan Agreement.

This Note is one of the Notes referred to in the Loan Agreement, dated as of July 31, 2019, between the Borrower and the Lenders party thereto from time to time (including the Initial Lender), (as amended, restated, amended and restated, modified and/or supplemented from time to time, the “Loan Agreement”; the capitalized terms defined therein being used herein as therein defined) and is entitled to the benefits thereof and of the other Credit Documents. This Note and all of the Obligations are secured by the Collateral as provided in the Security Documents. As provided in the Loan Agreement, this Note is subject to voluntary prepayment and mandatory repayment prior to the Facility Maturity Date.

In case an Event of Default has occurred and is continuing, the principal of and accrued interest on this Note may be declared to be due and payable in the manner and with the effect provided in the Loan Agreement.

The Borrower hereby waives presentment, demand, protest or notice of any kind in connection with this Note.

Whenever reference is made to the Lender or the Borrower in this Note, such reference shall be deemed to include, as applicable, a reference to its respective permitted successors and assigns. The provisions of this Note shall be binding upon and shall inure to the benefit of said successors and assigns. The Borrower’s successors and assigns shall include, without limitation, a receiver, trustee or debtor in possession of or for the Borrower.

Exhibit B-1

Page 2

THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION).

GRAÑA Y MONTERO S.A.A.

By:                                                                                  

Name:

Title:

By:                                                                                  

Name:

Title:

Exhibit B-2

FORM OF PERUVIAN NOTE

(Attached)

Nº                                         

PAGARÉ

POR: US$                                                  

VENCE EL:                                                  

Nosotros, Graña y Montero S.A.A. (el “Deudor”), con Registro Único de Contribuyente N° 20332600592, con domicilio en Av. Paseo de la República No. 4675, distrito de Surquillo, provincia y departamento de Lima, sociedad debidamente inscrita en la Partida Electrónica N° 11028652 del Registro de Personas Jurídicas de Lima, debidamente representada por el señor Daniel René Urbina Pérez, identificado con DNI N° 09382119, y por el señor Francisco Augusto Baertl Montori, identificado con DNI N° 07830436, ambos facultados según poderes inscritos en los Asientos C00096 y C00081 de la Partida Electrónica N° 11028652 del Registro de Personas Jurídicas de Lima, debemos y nos obligamos a pagar incondicionalmente a la orden y disposición de CS Peru Infrastructure Holdings LLC., una compañía de responsabilidad limitada organizada y existente de conformidad con las leyes del Estado de Delaware, Estados Unidos de América (el “Acreedor”) mediante fondos disponibles de inmediato y en la misma moneda, mediante depósito o transferencia de fondos en la cuenta a nombre del Acreedor que indique en su momento, o en el lugar que este Pagaré sea presentado a cobro en su vencimiento, o en caso de su negociación o transferencia, a la orden y disposición de la persona natural o jurídica tenedora del presente título valor, contra la presentación del original de este Pagaré debidamente completado, la suma de US$                                          (                                                  y 00/100 Dólares de los Estados Unidos de América), más los intereses compensatorios y moratorios correspondientes y cualquiera otra suma adeudada conforme al presente Pagaré, suma adeudada por nuestra parte al Acreedor por obligaciones contraídas a nuestra entera satisfacción.

Además del principal de este Pagaré, se pagarán los intereses compensatorios a la tasa efectiva anual de                                      por ciento (        %), desde el vencimiento de este Pagaré hasta la fecha efectiva de su pago total. Asimismo, desde la fecha de vencimiento del Pagaré hasta la fecha efectiva de su pago total, nos obligamos a pagar, adicionalmente a los intereses compensatorio, intereses moratorios a una tasa de dos por ciento (2%) anual, más gastos notariales, costos y costas judiciales y extrajudiciales incurridos por el Acreedor en razón de nuestro incumplimiento.

La tasa de interés compensatorio antes indicada será calculada sobre la base de un año de trescientos sesenta (360) días calendario, en función a los días efectivamente transcurridos, calculándose tales intereses sobre el monto remanente del principal.

El pago que realice el Deudor al tenedor de este Pagaré de conformidad con el mismo será efectuado libre de, y sin deducción de, todos y cualquier tributo, derecho, carga, gravamen, deducción, cargo o retención que sea de cargo del Deudor, conforme a la legislación aplicable, los cuales correrán por cuenta del Deudor. Sin perjuicio de ello, en el supuesto caso en que sea exigible algún pago por los conceptos antes mencionados, se pagará al Acreedor cantidades tales que el monto neto resultante, luego de pagar, retener o de cualquier otra forma descontar la totalidad de los tributos entonces vigentes u otros conceptos aplicables, sea igual a la totalidad de las prestaciones que tiene derecho a recibir el Acreedor conforme a lo estipulado en este Pagaré.

En aplicación de lo dispuesto por el artículo 49 de la Ley N° 27287, Ley de Títulos Valores, autorizamos expresamente para que el tenedor del presente Pagaré pueda prorrogar a su vencimiento o después de él, el plazo de vencimiento, ya sea por su importe total, cantidad menor o mayor que tuviera a bien concedernos el tenedor, sin requerirse de nuestra expresa suscripción, procediendo a su ejecución por el solo mérito de haber vencido su plazo sin haberse prorrogado. Bastará que las prórrogas sean anotadas en este mismo documento sin que sea necesario para su plena validez que lo suscribamos nuevamente.

De conformidad con lo establecido por el artículo 52 de la Ley N° 27287, Ley de Títulos Valores, queda expresamente establecido que el presente Pagaré no requiere ser protestado. Sin embargo, el tenedor queda facultado a protestarlo por falta de pago si así lo estimare conveniente; caso en el que asumiremos los gastos de tal diligencia notarial o de la formalidad sustitutoria correspondiente. El protesto podrá ser efectuado mediante notificación que se curse al domicilio del Deudor indicado en el presente Pagaré.

1

Queda establecido que las obligaciones contenidas en este Pagaré no se extinguirán aun cuando por culpa del Acreedor se hubiese perjudicado este Pagaré, constituyendo el presente acuerdo pacto en contrario a lo dispuesto por el artículo 1233° del Código Civil. Adicionalmente, en caso en el futuro se dictase cualquier norma o disposición legal que impida la realización de pagos en la moneda de este Pagaré, el Deudor no quedará eximido del pago del monto total indicado en este Pagaré, y pagará, en la oportunidad que corresponda, dicho monto total en moneda nacional, de manera tal que el importe que reciba el Acreedor sea suficiente para adquirir la cantidad de Dólares de los Estados Unidos de América que corresponda para efectuar el pago total del monto en esta moneda.

La suma representada en este Pagaré deberá pagarse exclusivamente en dólares de los Estados Unidos de América, constituyendo lo aquí señalado pacto en contrario a lo dispuesto por el artículo 1237 del Código Civil.

Nos sometemos expresamente a la competencia de los jueces y tribunales del distrito judicial de Lima-Cercado para todos los efectos, actos y consecuencias que se deriven de la emisión, interpretación, pago, ejecución y cobranza de la cantidad representada en el presente Pagaré, así como de los intereses, comisiones y gastos que se originen con relación al mismo, renunciando al fuero de su domicilio.

El Deudor señala como su domicilio para cualquier notificación, comunicación o requerimiento que deba efectuarse en relación al presente Pagaré, sea de carácter judicial o extrajudicial, el indicado al inicio del presente Pagaré, lugar donde se le reputará siempre presente para todos los efectos del presente Pagaré hasta el momento en que el Deudor cumpla con pagar la integridad de la suma representada por el mismo.

El Deudor expresamente autoriza al Acreedor a completar el presente Pagaré de conformidad con las instrucciones irrevocables de llenado de pagaré de fecha 31 de julio de 2019 (las “Instrucciones Irrevocables de Llenado”) conforme lo permite el artículo 10° de la Ley de Títulos Valores del Perú, Ley No. 27287. En este acto, el Deudor declara haber recibido copia de este Pagaré así como de las Instrucciones Irrevocables de Llenado, a su completa y entera satisfacción.

El presente Pagaré está sujeto, será interpretado y se regirá por las disposiciones de la Ley de Títulos Valores y demás normas y leyes de la República del Perú.

Este Pagaré consta de dos (2) páginas que constituyen un único instrumento.

Lima, 31 de julio de 2019

Graña y Montero S.A.A.

RUC N° 20332600592

Domicilio: Av. Paseo de la República No. 4675, distrito de Surquillo, provincia y departamento de Lima

Graña y Montero S.A.A.

RUC N° 20332600592

Domicilio: Av. Paseo de la República No. 4675, distrito de Surquillo, provincia y departamento de Lima

2

Acuerdo de Llenado de Pagaré

Por medio del presente documento, al amparo de lo previsto en el artículo 10 de la Ley N° 27287, Ley de Títulos Valores, Graña y Montero S.A.A. (el “Deudor”), con Registro Único de Contribuyente N° 20332600592, con domicilio en Av. Paseo de la República No. 4675, distrito de Surquillo, provincia y departamento de Lima, sociedad debidamente inscrita en la Partida Electrónica N° 11028652 del Registro de Personas Jurídicas de Lima, debidamente representada por el señor Daniel René Urbina Pérez, identificado con DNI N° 09382119, y por el señor Francisco Augusto Baertl Montori, identificado con DNI N° 07830436, ambos facultados según poderes inscritos en los Asientos C00096 y C00081 de la Partida Electrónica N° 11028652 del Registro de Personas Jurídicas de Lima; y, CS Peru Infrastructure Holdings LLC (el “Acreedor”) acuerdan que el Acreedor, o, en caso de negociación o transferencia del Pagaré, por la persona natural o jurídica tenedora del Pagaré, podrá completar el monto, la tasa de interés compensatorio y la fecha de vencimiento del pagaré incompleto emitido por el Deudor a favor del Acreedor el 31 de julio de 2019 (el “Pagaré”), en relación con obligaciones contraídas en virtud del Contrato de Préstamo (Loan Agreement) de fecha 31 de julio de 2019 suscrito entre le Acreedor y el Deudor (el “Contrato de Préstamo”), conforme el mismo sea modificado de tiempo en tiempo, de acuerdo a las instrucciones que se detallan a continuación:

1. Los términos en mayúsculas inicial contenidos en este documento que no estén expresamente definidos en este documento tendrán el respectivo significado previsto en el Contrato de Préstamo.

2. La fecha de vencimiento del Pagaré (la “Fecha de Vencimiento”) será la fecha en que el Pagaré sea completado por el Acreedor.

3. El Pagaré deberá ser completado ante la ocurrencia de un Evento de Incumplimiento (Event of Default), de acuerdo a lo establecido en el Contrato de Préstamo.

4. El monto a ser incorporado en el Pagaré será el que resulte de la liquidación que efectúe el Acreedor, luego de ocurrido un Evento de Incumplimiento, del íntegro de la deuda del Deudor frente al Acreedor por concepto de principal, intereses compensatorios, intereses moratorios, comisiones, costos, gastos y todo monto que se adeude por cualquier otro concepto, a la Fecha de Vencimiento (el “Monto”), de conformidad con el Contrato de Préstamo.

5. La tasa de interés compensatorio del Pagaré será completado por el Acreedor en función a la fecha en que sea completado el Pagaré, según las provisiones que resulten aplicables del Contrato de Préstamo.

6. A efectos de completar el Pagaré, el Acreedor no requerirá aprobación o consentimiento del Deudor, y ninguna decisión o sentencia emitida por un juez, tribunal arbitral, autoridad administrativa o cualquier otra autoridad, ya sea de manera previa, simultánea o posterior, será necesaria para dicho fin.

7. El monto adeudado por el Deudor a favor del Acreedor bajo el Pagaré será necesariamente pagado en Dólares y así se completará el mismo. Asimismo, el Deudor reconoce y declara que el Pagaré es emitido con la cláusula “sin protesto”, sin perjuicio de lo cual el Acreedor podrá protestarlo asumiendo el Deudor los gastos de dicha diligencia.

8. Si no fuera posible, bajo cualquier Ley Aplicable, realizar un pago a favor del Acreedor en la moneda pactada bajo el Contrato de Préstamo, y en la medida en que la cantidad efectivamente recibida por el Acreedor cuando convierta el pago recibido a la moneda pactada (a la “tasa de cambio”) no llegase a la cantidad adeudada en virtud del Contrato de Préstamo, el Deudor se obliga, como una obligación independiente, a indemnizar al Acreedor por el monto faltante que hubiera recibido el Acreedor si hubiera recibido el pago en la moneda pactada. Para los fines de este numeral, “tasa de cambio” significa la tasa a la que el Acreedor puede comprar en la fecha de pago correspondiente la moneda pactada con el monto total de la moneda efectivamente pagada (tomando en cuenta los costos y primas que pueda recibir por dicho pago).

Sin limitar la generalidad de lo anterior y para efectos de la ejecución del Pagaré de acuerdo a las leyes peruanas, el Acreedor tendrá el derecho de requerir todos los pagos debidos bajo el Contrato de

1

Préstamo, aplicando la tasa de cambio vigente al momento de dicha ejecución (de US$ a Soles), publicada por la siguiente página web oficial del Banco Central de Reserva: (https://estadisticas.bcrp.gob.pe/estadisticas/series/mensuales/resultados/PN01234PM/html) u otra publicación que la reemplace.

9. El Deudor acepta y da por válidas todas las renovaciones y/o prórrogas totales o parciales que se anoten en el respectivo Pagaré, aun cuando no estén suscritas por éste. El Acreedor comunicará al Deudor respecto de las renovaciones y/o prórrogas que se anoten en el respectivo Pagaré.

10. El Deudor reconoce expresamente los mecanismos de protección que la ley otorga para la emisión y aceptación de un pagaré incompleto. En consecuencia, y según lo permitido por el artículo 10 de la Ley de Títulos Valores, el Deudor deja expresa constancia que ha recibido (a) copia del Pagaré y (b) estas Instrucciones, debidamente firmados por el Deudor, que se entrega al Acreedor en la fecha que se indica a continuación.

Este documento se rige por las leyes de la República del Perú y las Partes se someten a la jurisdicción y competencia de los jueces y tribunales del Distrito Judicial del Cercado de Lima.

Se deja constancia que el Deudor ha recibido una copia del Pagaré.

Este documento es suscrito por el Deudor, el 31 de julio de 2019.

Graña y Montero S.A.A.

RUC N° 20332600592

Domicilio: Av. Paseo de la República No. 4675, distrito de Surquillo, provincia y departamento de Lima

Graña y Montero S.A.A.

RUC N° 20332600592

Domicilio: Av. Paseo de la República No. 4675, distrito de Surquillo, provincia y departamento de Lima

2

Exhibit C

FORM OF SOLVENCY CERTIFICATE

SOLVENCY CERTIFICATE

July 31, 2019

To each of the Lenders party to the Loan Agreement referred to below:

I, the undersigned, Chief Financial Officer of GRAÑA Y MONTERO S.A.A., a sociedad anónima abierta organized and existing under the law of Peru (the “Borrower”), in that capacity and not in my individual capacity, do hereby certify as of the date hereof that:

1.    This certificate is furnished to the Lenders pursuant to Section 5.03(b) of the Loan Agreement, dated as of July 31, 2019, between the Borrower, CS Peru Infrastructure Holdings LLC, as Initial Lender, and any other lenders from time to time party thereto (each, a “Lender” and, collectively, the “Lenders”), (as amended, restated, amended and restated, supplemented and/or otherwise modified from time to time, the “Loan Agreement”). Unless otherwise defined herein, capitalized terms used in this certificate shall have the meanings set forth in the Loan Agreement.

2.    For purposes of this certificate, the terms below shall have the following definitions:

(a) “Fair Value”

The amount at which the assets (both tangible and intangible), in their entirety, of the Borrower (on a stand-alone basis) and the Borrower or the Main Subsidiaries (taken as a whole), as the case may be, would change hands between a willing buyer and a willing seller, within a commercially reasonable period of time, each having reasonable knowledge of the relevant facts, with neither being under any compulsion to act.

(b) “Present Fair Salable Value”

The amount that could be obtained by an independent willing seller from an independent willing buyer if the assets of the Borrower (on a stand-alone basis) and the Borrower or the Main Subsidiaries (taken as a whole), as the case may be, are sold with reasonable promptness in an arm’s-length transaction under present conditions for the sale of comparable business enterprises.

(c) “New Financing”

All Indebtedness incurred or assumed or to be incurred by the Borrower in connection with the Transaction (including Indebtedness under the Credit Documents (assuming the full utilization by the Borrower of the Commitments under the Loan Agreement), in each case after giving effect to the Transaction and the incurrence of all financings, redemptions and repayments in connection therewith.

Exhibit C

Page 2

(d) “Liabilities”

The recorded liabilities (including contingent liabilities that would be recorded in accordance with IFRS) of the Borrower (on a stand-alone basis) and the Borrower or the Main Subsidiaries (taken as a whole), as the case may be, as of the date hereof after giving effect to the consummation of the Transaction, determined in accordance with IFRS consistently applied, together with the amount of the New Financing.

(e) “will be able to pay their debts and Liabilities, contingent obligations and other commitments as they mature in the ordinary course of business”

For the period from the date hereof through the latest stated maturity of the New Financing, the Borrower (on a stand-alone basis) and the Borrower or the Main Subsidiaries (taken as a whole), as the case may be, will have sufficient assets and cash flow to pay its or their respective Liabilities and other commitments as they mature in the ordinary course of business.

3.    I hereby certify on behalf of the Borrower, that, on and as of the date hereof and after giving effect to the consummation of the Transaction and the incurrence of the New Financing, it is my opinion that (a) the Fair Value of the property of each of (i) the Borrower (on a stand-alone basis) and (ii) the Borrower and the Main Subsidiaries (taken as a whole), as the case may be, will be greater than the total amount of its or their respective Liabilities (b) the Present Fair Salable Value of the assets of each of (i) the Borrower (on a stand-alone basis) and (ii) the Borrower and the Main Subsidiaries (taken as a whole), as the case may be, will not be less than the amount that will be required to pay the probable liabilities thereof on its or their respective debts as they become absolute and matured, (c) each of (i) the Borrower (on a stand-alone basis), (ii) and the Borrower and the Main Subsidiaries (taken as a whole), as the case may be, do not intend to, and do not believe that it or they will, incur debts or Liabilities beyond its or their respective ability to pay such debts and Liabilities as they mature, (d) each of (i) the Borrower (on a stand-alone basis), and (ii) the Borrower and the Main Subsidiaries (taken as a whole), as the case may be, will be able to pay its or their respective debts and Liabilities, contingent obligations and other commitments as they mature in the ordinary course of business and (e) each of (i) the Borrower (on a stand-alone basis), and (ii) the Borrower and the Main Subsidiaries (taken as a whole), as the case may be, will not be insolvent as defined under applicable insolvency laws.

4.    The Borrower does not intend, in consummating the Transaction contemplated by the Loan Agreement, to delay, hinder, or defraud either present or future creditors.

[Remainder of page intentionally left blank.]

Exhibit C

Page 3

IN WITNESS WHEREOF, the undersigned has set his/her hand as of the date above first written.

GRAÑA Y MONTERO S.A.A.
By:
Name:
Title:	Chief Financial Officer

Exhibit D

FORM OF CLOSING DATE CERTIFICATE

CLOSING DATE CERTIFICATE

GRAÑA Y MONTERO S.A.A.

July 31, 2019

This Closing Date Certificate (this “Certificate”) is being furnished by Graña y Montero S.A.A., a Peruvian sociedad anónima abierta (the “Company”) pursuant to Section 5.03(c) of the Loan Agreement, dated as of the date hereof (the “Loan Agreement”), between the Company, as Borrower, and CS Peru Infrastructure Holdings LLC, as the Initial Lender. Capitalized terms used herein, unless otherwise defined herein, have the meanings assigned to them in the Loan Agreement.

The undersigned hereby certifies, on behalf of the Company, only in his or her capacity as a duly elected, qualified and acting Authorized Officer of the Company, and not in the Authorized Officer’s individual capacity, as follows as of the date hereof:

1. I am a duly elected, qualified and acting Authorized Officer of the Company having the title set forth on the signature page hereto, and, as such, I am authorized to execute and deliver this Certificate on behalf of the Company.

2. I have reviewed the terms of Sections 5 and 6 of the Loan Agreement and the definitions and provisions contained in the Loan Agreement relating thereto, and in my opinion I have made, or have caused to be made under my supervision, such examination or investigation as is reasonably necessary to enable me to express an informed opinion as to the matters referred to herein.

3. The representations and warranties set forth in the Loan Agreement and the other Credit Documents are true and correct in all material respects as of the date hereof, as though made on and as of the date hereof (and to the extent that any such representation and warranty is otherwise qualified by materiality or Material Adverse Effect, such representation and warranty is true and correct in all respects), except to the extent such representations and warranties expressly relate to a specified date, in which case such representations and warranties are true and correct in all material respects (and to the extent that any such representation and warranty is otherwise qualified by materiality or Material Adverse Effect, such representation and warranty is true and correct in all respects) as of such specified date.

4. No Default or Event of Default has occurred and is continuing or would result from the Borrowing of the Loans and the application of the proceeds therefrom on the date hereof.

5. All material governmental and third party consents and approvals necessary to have been obtained on or prior to the date hereof in connection with the Transaction were obtained and are in full force and effect.

Exhibit D

Page 2

6. Since December 31, 2018, there has been no Material Adverse Effect.

7. After giving effect to the consummation of the Transaction, the Company and all of the Borrower Subsidiaries have no outstanding preferred equity or Indebtedness, except for (a) Indebtedness incurred pursuant to, or as permitted by, the terms of the Loan Agreement and (b) the Existing Indebtedness.

8. After giving effect to the consummation of the Transaction, the Company and the Main Subsidiaries shall have no Liens upon or with respect to (a) any of their respective property, assets or revenues (other than the Collateral), except for Permitted Liens, and (b) any of the Collateral, except for Liens created pursuant to the Credit Documents and, to the extent applicable, the Adexus Financing Lien.

9. After giving effect to the consummation of the Transaction, the Company is in compliance with the maximum Leverage Ratio set forth in Section 5.16 of the Loan Agreement for the Fiscal Quarter ending on June 30, 2019. The basis and calculations for determining the Company’s compliance with the maximum Leverage Ratio for such Fiscal Quarter are set forth in Exhibit A attached hereto.

10. Concurrently with the consummation of the Transaction, the prepayment amount described in the Local Facility Waiver, made in accordance with the terms of the Local Facility, shall have been deposited in the trust account described therein, and all of the security interests in and Liens on, and assignments of, the rights of the Borrower to collect the proceeds of any sale of (x) all or any material portion of the Equity Interests the Borrower owns in Adexus or (y) all or substantially all of the assets of Adexus, in each case, granted in favor of the lenders in connection therewith shall have been terminated and released.

11. True and correct copies of the unaudited consolidated balance sheet and related statement of income and cash flows of the Borrower for each Fiscal Quarter of the Borrower (individual and on a Consolidated basis) ended after the close of its most recent Fiscal Year are attached hereto as Exhibit B.

12. As of the Closing Date, the authorized capital stock of Adexus consists of 334,500 shares, of which (i) 334,499 shares have been subscribed and paid for by the Borrower, and (ii) one share has been subscribed for by Concar S.A.

This Certificate may be executed in several counterparts, including without limitation, by electronic (e.g., “pdf” or “tif”) format, each of which shall constitute an original and one and the same instrument.

[Signature page follows.]

Exhibit D

Page 3

IN WITNESS WHEREOF, the undersigned Authorized Officer has executed and delivered this Certificate on behalf of the Company, in his or her capacity as a duly elected, qualified and acting Authorized Officer of the Company (and not in the Authorized Officer’s individual capacity).

GRAÑA Y MONTERO S.A.A.

By:

Name:

Title:

[GyM - Closing Date Certificate]

Exhibit D

Page 4

EXHIBIT A

[Maximum Leverage Ratio Calculation]

i.	Consolidated Indebtedness1
		a.   The Consolidated Indebtedness of the Borrower at the end of the Fiscal Quarter	$
		b.  less the Norvial Holdco Facility Indebtedness2	$
		ConsolidatedIndebtedness ((a) less (b)):	$
ii.	Consolidated EBITDA3 (each component as determined in accordance with IFRS)
		a.   The Consolidated net profit of the Borrower for such Measurement Period, plus (to the extent deducted in calculating such net profit)	$
		b.  Financial (expense) income, net, plus	$
		c.   Income tax, plus	$

¹ “Consolidated Indebtedness” shall mean, at the end of each Fiscal Quarter, with respect to the Borrower, Indebtedness of the Borrower on a Consolidated basis, less the Norvial Holdco Facility Indebtedness.

² “Norvial Holdco Facility Indebtedness” shall mean the Acuerdo de Inversión, dated as of May 29, 2018, entered into by and between the Borrower and BCI Perú for an investment in Norvial through the acquisition of all the Class B shares issued by Norvial, as well as the Shareholders Agreement, dated as of June 11, 2018, by and among the Borrower, Inversiones Concesiones Vial S.A.C. and Inversiones en Autopistas.

³ “Consolidated EBITDA” for any period, shall mean, with respect to the Borrower on a Consolidated basis, without duplication, net profit plus, to the extent deducted in calculating such net profit, (i) financial (expense) income, net; (ii) income tax; (iii) depreciation and amortization; (iv) the amount corresponding to the tariff for the Line 1 Concession Agreement actually paid to GyM Ferrovias during such period (on account of the Peruvian government’s repayment of amounts invested by GyM Ferrovias to purchase trains and other infrastructure for the Line 1 Concession Agreement); and (v) the portion of costs of sales during such period related to the purchase of land in the Borrower’s real estate segment, in each case determined in accordance with IFRS.

[GyM - Closing Date Certificate]

Exhibit D

Page 5

		d.  Depreciation and amortization, plus	$
		e.   The amount corresponding to the tariff for the Line 1 Concession Agreement actually paid to GyM Ferrovias for such Measurement Period (on account of the Peruvian government’s repayment of amounts invested by GyM Ferrovias to purchase trains and other infrastructure for the Line 1 Concession Agreement), plus	$
		f.   The portion of costs of sales for such Measurement Period related to the purchase of land in the Borrower’s real estate segment	$
		EqualsConsolidated EBITDA:	$
iii.	Leverage Ratio (the ratio of (a) Consolidated Indebtedness to (b) Consolidated EBITDA)			[        ]:1.00
iv.	Maximum permitted Leverage Ratio at the end of the Measurement Period			3.50:1.00
v.	In compliance			[Yes] [No]

[GyM - Closing Date Certificate]

Exhibit D

Page 6

EXHIBIT B

[Financial Statements]

[GyM - Closing Date Certificate]

Exhibit E-1

FORMS OF OPINION OF NEW YORK COUNSEL TO THE BORROWER

(Attached)

July 31, 2019

CS Peru Infrastructure Holdings LLC, in its capacity as the Initial Lender under the Loan Agreement (as described below)

20 Dayton Avenue

Greenwich, CT 06830

Ladies and Gentlemen:

We have acted as special New York counsel to Graña y Montero S.A.A., a sociedad anónima abierta organized under the laws of Peru (the “Borrower”) in connection with the Loan Agreement dated as of July 31, 2019 (including the Exhibits and Schedules thereto, the “Loan Agreement”), among the Borrower, CS Peru Infrastructure Holdings LLC, a Delaware limited liability company (the “Initial Lender”), and any other lenders from time to time party thereto. This opinion letter is being delivered to you pursuant to Section 5.03(a) of the Loan Agreement. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement.

As such counsel and for purposes of our opinions set forth below, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate, limited liability company or other entity records, certificates of public officials and other instruments as we have deemed necessary or appropriate as a basis for the opinions set forth herein, including, without limitation:

(i) the Loan Agreement; and

(ii) the Fee Letter dated as of July 31, 2019 (the “Fee Letter”), by and between the Borrower and Gramercy Funds Management LLC.

The Loan Agreement and the Fee Letter are referred to herein, individually, as a “Credit Document” and, collectively, as the “Credit Documents”. In addition, we have made such investigations of law as we have deemed relevant and necessary as a basis for the opinions expressed below.

In such examination and in rendering the opinions expressed below we have assumed: (i) (x) that each of the parties to the Credit Documents is a validly existing entity in the jurisdiction of its organization, in good standing in each applicable jurisdiction and has the power and authority to execute and deliver, and to perform its obligations under, the Credit Documents to which it is a party and that such execution, delivery and performance does not violate any provision of the certificate of incorporation (or equivalent formation document) of each such party, and (y) the due

Page 2

authorization, execution and delivery of each Credit Document, and each other document referred to above by all of the parties thereto; (ii) the genuineness of all signatures on all documents submitted to us; (iii) the authenticity and completeness of all documents, corporate records, certificates and other instruments reviewed by us; (iv) that photocopy, electronic, certified, conformed, facsimile and other copies of original documents, corporate records, certificates and other instruments reviewed by us conform to such original documents, records, certificates and other instruments; (v) the legal capacity and competency of all individuals executing documents; (vi) that (x) the Credit Documents are the valid and binding obligations of each of the parties thereto (other than the Borrower) under New York law, enforceable against such parties (other than the Borrower) under New York law in accordance with their respective terms and have not been amended or terminated orally or in writing, and (y) the status of the Credit Documents as legally valid and binding obligations of the parties is not affected by any (1) violations of statutes, rules, regulations or court or governmental orders, or (2) failures to obtain required consents, approvals or authorizations from, or to make required registrations, declarations or filings with, governmental authorities, except in the case of both (1) and (2) above, to the extent of our opinions in paragraphs 2 and 3, as applicable; (vii) that there are no agreements or understandings between or among any of the parties to the Credit Documents or third parties that would expand, modify or otherwise affect the terms of the Credit Documents or the respective rights or obligations of the parties thereunder or that would modify, release, terminate, subordinate or delay the attachment of the security interest and liens granted thereunder; (viii) that the factual statements contained in the certificates and comparable documents of public officials, officers and representatives of the Borrower and other Persons on which we have relied for the purposes of this opinion letter are true and correct on and as of the date hereof; (ix) that the officers, directors, and stockholders of the Borrower have properly exercised their fiduciary duties; and (x) the rights and remedies set forth in the Credit Documents will be exercised reasonably and in good faith and were granted without fraud or duress and for good, valuable and adequate consideration and without intent to hinder, delay or defeat any rights of any creditors or stockholders of, or other holders of equity interests in the Borrower. As to all questions of fact material to this opinion letter, we have relied (without independent investigation, except as expressly indicated herein) upon certificates or comparable documents of officers and representatives of the Borrower and upon the representations and warranties of the Borrower contained in the Loan Agreement.

We have been retained as special New York counsel to the Borrower in connection with the transactions contemplated by the Credit Documents and have not represented the Borrower in a general capacity and are not familiar with the nature and full extent of the Borrower’s assets, activities, characteristics and operations. Accordingly, we have assumed that the assets, activities, characteristics and operations of the Borrower are not of such nature as to cause the transactions contemplated by the Credit Documents to be governed by laws or regulations of the State of New York or of the United States of America applicable only because of particular assets, activities,

Page 3

characteristics or operations and not applicable to business corporations generally. We have also assumed that the Borrower is in compliance with all laws and regulations applicable to it because of the nature of its assets, activities and operations (and other characteristics) if non-compliance impairs or affects the enforceability of any Credit Document, that the execution, delivery and performance of the Credit Document will not violate any of those laws or regulations, and that none of those laws or regulations prohibits, invalidates or affects the execution, delivery or performance of the Credit Documents by the Borrower.

Based upon the foregoing, and in reliance thereon, and subject to the assumptions, limitations, qualifications and exceptions set forth herein, we are of the following opinions:

1.     Each of the Credit Documents constitutes the valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms.

2.     The execution and delivery by the Borrower of the Credit Documents and the performance by the Borrower of its obligations thereunder, do not cause the Borrower to violate any federal or New York State statute, rule or regulation, including, without limitation, Regulations U or X of the Board of Governors of the Federal Reserve System, assuming the Borrower complies with the provisions of the Credit Documents relating to the use of proceeds.

3.     No consent, approval or authorization of, or filing with, any federal or New York State governmental body or authority is required to be obtained or made by the Borrower to authorize, or is otherwise required to be obtained or made by the Borrower in connection with the execution, delivery and performance of the Credit Documents.

4.     The Borrower is not required to register as an “investment company” as defined in the Investment Company Act of 1940, as amended.

The foregoing opinions are subject to the following assumptions, exceptions, qualifications and limitations:

A.    We express no opinion with respect to any of the following (collectively, the “Excluded Laws”): (i) anti-fraud laws or, except as expressly set forth in opinion paragraph 4, other federal or state securities laws; (ii) Federal Reserve Board margin regulations (other than as set forth in our opinion paragraph 2); (iii) pension or employee benefit laws, e.g., ERISA; (iv) the statutes, ordinances, administrative decisions or rules and regulations of counties, towns, municipalities and other political subdivisions (whether created or enabled through legislative action at the federal, state or regional level); (v) federal or state tax laws; (vi) export, import or customs laws; (vii) anti-terrorism orders, as the same may be renewed, extended, amended or replaced, or any

Page 4

federal, state or local laws, statutes, ordinances, orders, governmental rules, regulations, licensing requirements or policies relating to the same, including, without limitation, Executive Order 13224, effective September 24, 2001; (viii) the USA Patriot Improvement and Reauthorization Act of 2005, its successor statutes or similar statutes in effect from time to time, or the policies promulgated thereunder or any foreign assets control regulations of the United States Treasury Department or any enabling legislation or order relating thereto; (ix) federal or state banking or insurance laws; or, in the case of each of the foregoing, any rules or regulations promulgated thereunder or administrative or judicial decisions with respect thereto.

B.    Our opinions are subject to (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally, including, without limitation, fraudulent transfer or fraudulent conveyance laws; (ii) the effect of public policy considerations, statutes or court decisions that may limit rights to obtain exculpation, indemnification or contribution (including, without limitation, indemnification regarding violations of the securities laws and indemnification for losses resulting from a judgment for the payment of any amount other than in United States dollars); (iii) the effect of general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing) and the availability of equitable remedies (including, without limitation, specific performance and equitable relief), regardless of whether considered in a proceeding in equity or at law; and (iv) the possible judicial application of foreign laws or foreign governmental action affecting the rights of creditors generally.

C.    We express no opinion with respect to (i) the truth of the factual representations and warranties contained in the Credit Documents, or (ii) any other document or agreement other than the Credit Documents, regardless of whether such document or agreement is referred to in the Credit Documents.

D.    The enforceability of provisions in the Credit Documents to the effect that terms may not be waived or modified except in writing may be limited under certain circumstances.

E.    We express no opinion with respect to the effect that the introduction of extrinsic evidence as to the meaning of any Credit Document may have on the opinions expressed herein.

F.    The enforceability of any indemnification obligation contained in Section 10.01 of the Loan Agreement and similar provisions in any other Credit Documents may be limited by public policy, statutes, court decisions or by laws limiting the enforceability of provisions exculpating or exempting a party from, or requiring indemnification of a party for, liability of its own action or inaction, to the extent that the action or inaction involves gross negligence, recklessness, willful misconduct or unlawful conduct.

Page 5

G.    We express no opinion as to (i) the effect of the laws of any jurisdiction in which the Initial Lender is located (other than New York) that limits the interest, fees or other charges it may impose for the loan or use of money or other credit; (ii) Section 10.08 of the Loan Agreement and similar provisions in any other Credit Document insofar as such provision relates to the subject-matter jurisdiction of the United States District Court of the Southern District of New York, (iii) the waiver of inconvenient forum set forth in Section 10.08(d) of the Loan Agreement and similar provisions in any of the other Credit Documents with respect to proceedings in the United States District Court for the Southern District of New York, (iv) any provision purporting to establish evidentiary standards, or (v) any document or agreement other than the Credit Documents, regardless of whether such document or agreement is referred to in the Credit Documents.

H.    We express no opinion with respect to the validity, binding effect or enforceability of any provision of the Credit Documents insofar as it purports to effect a choice of governing law or choice of forum for the adjudication of disputes or with respect to the acceptance by a federal court located in the State of New York of jurisdiction of a dispute arising under the Credit Documents, other than (a) the enforceability by a New York State court or a federal court located in the State of New York under New York General Obligations Law Section 5-1401 of the choice of New York State law as the governing law of the Credit Documents (subject, however, to the extent limited by the Constitution of the United States and by Section 1-301 of the Uniform Commercial Code as in effect in the State of New York (the “New York UCC”)) and (b) the enforceability by a New York State court under New York General Obligations Law Section 5-1402 of New York State courts as a non-exclusive forum for the adjudication of disputes with respect to the Credit Documents.

I.    The opinions expressed above relate only to those laws and regulations (other than the Excluded Laws) that, in our experience, are generally applicable to transactions in nature of those contemplated by the Credit Documents between unregulated parties. Without limitation of the foregoing, we express no opinion as to the effect of, or as to compliance by the Borrower with, any law or regulation that may be applicable to the transactions contemplated by any Credit Document because of the nature of the business conducted by the Borrower or their respective subsidiaries.

J.    We note that effective enforcement of a foreign currency claim in the courts of the State of New York or U.S. federal courts sitting in the State of New York may be limited by requirements that the claim (or a foreign currency judgment in respect of the claim), or a claim with respect to any guarantee of the claim, be converted into U.S. dollars at the rate of exchange prevailing on the date of the judgment or decree by the New York court or U.S. federal court.

Page 6

K.    We express no opinion as to the enforceability of (i) any waiver of any applicable defenses, rights of set-off or counterclaim that are not capable of waiver; or (ii) any provision relating to the severability of the provisions in the Credit Documents.

L.    We express no opinion with respect to any provision regarding “bail-in” statutes or similar laws.

M.    We express no opinion as to the effect on our opinions regarding the Credit Documents arising out of the status of activities of, or laws applicable to the Initial Lender to the Credit Documents (other than the Borrower under federal laws of the United States of America or laws of the State of New York), and, without limiting the foregoing, we are not expressing any opinion as to the effect of compliance or non-compliance by the Initial Lender with any state or federal laws or regulations applicable to the transactions contemplated by the Credit Documents because of the nature of any of its businesses.

N.    We express no opinion as to the validity, binding effect or enforceability of (i) negative pledge clauses contained in the Credit Documents to the extent those clauses are limited or rendered unenforceable by Sections 9-401, 9-406, 9-407, 9-408 and 9-409 of the New York UCC, (ii) any provision of the Credit Documents allowing any party to exercise any remedial rights without notice to the Borrower, (iii) any provision of the Credit Documents providing for the effectiveness of service of process by mail in any suit, action or proceeding of any nature arising in connection with or in any way relating to any Credit Document, (iv) any provision of the Credit Documents stating that rights or remedies are not exclusive, that every right or remedy is cumulative and may be exercised in addition to any other right or remedy, that the election of some particular remedy does not preclude recourse to one or more others or that failure to exercise or delay in exercising rights or remedies will not operate as a waiver of any such right or remedy, (v) any provision of the Credit Documents stating that time is of the essence, (vi) any provision of the Credit Documents that constitutes (or is construed to constitute) an agreement to agree or (vii) any rights of setoff asserted by a participant in the rights of the Initial Lender under the Credit Documents.

O.    We express no opinion with respect to (i) the right, title or interest of the Borrower in or to any property, (ii) the creation or perfection of any security interests or liens or (iii) priority of any security interest or liens.

Without limiting any of the other limitations, exceptions and qualifications stated elsewhere herein (including, without limitation, the qualification set forth in paragraph A with respect to Excluded Laws), we express no opinion with regard to any law other than, as in effect on the date of this opinion letter, (i) the federal laws of the United States of America and (ii) the laws of the State of New York, and we do not express any opinion as to the laws of any other jurisdiction.

Page 7

This opinion letter deals only with the specified legal issues expressly addressed herein, and you should not infer any opinion that is not explicitly addressed herein from any matter stated in this opinion letter. The opinions expressed herein are to be governed by the law of the State of New York and shall be construed in accordance with the customary practice in New York of lawyers who regularly give, and lawyers who regularly advise opinion recipients regarding, opinions of the kinds contained herein.

This opinion letter is solely for the benefit of the Initial Lender, in connection with the Credit Documents and may not be relied upon by any other person (including any other Lender) for any other purpose, or furnished, assigned, or quoted to any other Person, except that:

(a)    at your request, we hereby consent to reliance hereon by any person that becomes a Lender under the Loan Agreement in accordance with the provisions of Sections 2.08(b) or 10.04(b) thereof (each, an “Additional Lender”), on the condition and understanding that (i) this opinion letter speaks only as of the date hereof, (ii) we have no responsibility or obligation to update this opinion letter, to consider its applicability or correctness to any person or entity other than its addressee, or to take into account changes in law, facts or any other developments of which we may later become aware, (iii) any such reliance (x) must be actual and reasonable under the circumstances existing at the time such person becomes an Additional Lender, including any circumstances relating to changes in law, facts or any other developments known to or reasonably knowable by such Additional Lender at such time and (y) can occur only after such Additional Lender’s consultation concerning this opinion letter with counsel experienced in secured lending matters, (iv) our consent to such reliance shall not constitute a reissuance of this opinion letter or otherwise extend any statute of limitations period applicable hereto on the date of this opinion letter, and (v) in no event shall any Additional Lender have any greater rights with respect hereto than the original addressees of this opinion letter; and

(b)    copies of this opinion letter may be disclosed (but may not be relied upon by) (i) to accountants, rating agencies, auditors, counsel and other professional advisors for any Lender on the basis that they make no further disclosure, (ii) to the officers and employees of any Lender on the basis that they make no further disclosure, (iii) in connection with any legal action arising out of or in connection with the transactions contemplated by the Credit Documents, (iv) to any person to whom disclosure is required to be made by applicable law or order of any court or governmental agency or is required or requested pursuant to the rules or regulations of any supervisory or regulatory authority or in connection with any judicial proceedings and (v) to any permitted assignee of or participant in the interest of any Lender under the Credit Documents. The opinions expressed herein are rendered on and as of the date hereof and

Page 8

are not to be deemed to have been reissued or updated by any subsequent delivery of a copy hereof. We assume no obligation to advise you as to any legal development or factual matter arising subsequent to the date hereof that might affect the opinions expressed herein.

Very truly yours,

July 31, 2019

CS Peru Infrastructure Holdings LLC, in its capacity as the Initial Lender under the Loan Agreement (as described below)

20 Dayton Avenue

Greenwich, CT 06830

Ladies and Gentlemen:

We have acted as special New York counsel to Graña y Montero S.A.A., a sociedad anónima abierta organized under the laws of Peru (the “Company”) in connection with the Loan Agreement dated as of July 31, 2019 (including the Exhibits and Schedules thereto, the “Loan Agreement”), among the Company, CS Peru Infrastructure Holdings LLC, a Delaware limited liability company (the “Initial Lender”), and any other lenders from time to time party thereto, and the related Indemnity Agreement dated as of July 31, 2019 (the “Indemnity Agreement”), among the Company, CS Peru Infrastructure Holdings LLC, and any other lenders from time to time party thereto. This opinion letter is being delivered to you pursuant to Section 5.03(a) of the Loan Agreement. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement.

As such counsel and for purposes of our opinions set forth below, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate, limited liability company or other entity records, certificates of public officials and other instruments as we have deemed necessary or appropriate as a basis for the opinions set forth herein, including, without limitation:

(i)    the Indemnity Agreement.

In addition, we have made such investigations of law as we have deemed relevant and necessary as a basis for the opinions expressed below.

In such examination and in rendering the opinions expressed below we have assumed: (i) (x) that each of the parties to the Indemnity Agreement is a validly existing entity in the jurisdiction of its organization, in good standing in each applicable jurisdiction and has the power and authority to execute and deliver, and to perform its obligations under, the Indemnity Agreement and that such execution, delivery and performance does not violate any provision of the certificate of incorporation (or equivalent formation document) of each such party, and (y) the due authorization, execution and delivery of the Indemnity Agreement by all of the parties thereto; (ii) the genuineness of all signatures on all documents submitted to us; (iii) the authenticity and completeness of all documents, corporate records, certificates and other instruments

Page 2

reviewed by us; (iv) that photocopy, electronic, certified, conformed, facsimile and other copies of original documents, corporate records, certificates and other instruments reviewed by us conform to such original documents, records, certificates and other instruments; (v) the legal capacity and competency of all individuals executing documents; (vi) that (x) the Indemnity Agreement is the valid and binding obligation of each of the parties thereto (other than the Company) under New York law, enforceable against such parties (other than the Company) under New York law in accordance with its terms and has not been amended or terminated orally or in writing, and (y) the status of the Indemnity Agreement as the legally valid and binding obligation of the parties is not affected by any (1) violations of statutes, rules, regulations or court or governmental orders, or (2) failures to obtain required consents, approvals or authorizations from, or to make required registrations, declarations or filings with, governmental authorities, except in the case of both (1) and (2) above, to the extent of our opinions in paragraphs 2 and 3, as applicable; (vii) that there are no agreements or understandings between or among any of the parties to the Indemnity Agreement or third parties that would expand, modify or otherwise affect the terms of the Indemnity Agreement or the respective rights or obligations of the parties thereunder; (viii) that the factual statements contained in the certificates and comparable documents of public officials, officers and representatives of the Company and other Persons on which we have relied for the purposes of this opinion letter are true and correct on and as of the date hereof; (ix) that the officers, directors, and stockholders of the Company have properly exercised their fiduciary duties; and (x) the rights and remedies set forth in the Indemnity Agreement will be exercised reasonably and in good faith and were granted without fraud or duress and for good, valuable and adequate consideration and without intent to hinder, delay or defeat any rights of any creditors or stockholders of, or other holders of equity interests in the Company. As to all questions of fact material to this opinion letter, we have relied (without independent investigation, except as expressly indicated herein) upon certificates or comparable documents of officers and representatives of the Company and upon the representations and warranties of the Company contained in the Indemnity Agreement.

We have been retained as special New York counsel to the Company in connection with the transactions contemplated by the Loan Agreement and its ancillary documents, including the Indemnity Agreement, and have not represented the Company in a general capacity and are not familiar with the nature and full extent of the Company’s assets, activities, characteristics and operations. Accordingly, we have assumed that the assets, activities, characteristics and operations of the Company are not of such nature as to cause the transactions contemplated by the Loan Agreement and its ancillary documents, including the Indemnity Agreement, to be governed by laws or regulations of the State of New York or of the United States of America applicable only because of particular assets, activities, characteristics or operations and not applicable to business corporations generally. We have also assumed that the Company is in compliance with all laws and regulations applicable to it because of the nature of its assets, activities and operations (and other characteristics) if non-compliance impairs or affects the enforceability of the Indemnity Agreement, that the execution, delivery and

Page 3

performance of the Indemnity Agreement will not violate any of those laws or regulations, and that none of those laws or regulations prohibits, invalidates or affects the execution, delivery or performance of the Indemnity Agreement by the Company.

Based upon the foregoing, and in reliance thereon, and subject to the assumptions, limitations, qualifications and exceptions set forth herein, we are of the following opinions:

1. The Indemnity Agreement constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

2. The execution and delivery by the Company of the Indemnity Agreement, and the performance by the Company of its obligations thereunder, do not cause the Company to violate any federal or New York State statute, rule or regulation.

3. No consent, approval or authorization of, or filing with, any federal or New York State governmental body or authority is required to be obtained or made by the Company in connection with the execution, delivery and performance of the Indemnity Agreement.

The foregoing opinions are subject to the following assumptions, exceptions, qualifications and limitations:

A. We express no opinion with respect to any of the following (collectively, the “Excluded Laws”): (i) anti-fraud laws or, other federal or state securities laws; (ii) Federal Reserve Board margin regulations; (iii) pension or employee benefit laws, e.g., ERISA; (iv) the statutes, ordinances, administrative decisions or rules and regulations of counties, towns, municipalities and other political subdivisions (whether created or enabled through legislative action at the federal, state or regional level); (v) federal or state tax laws; (vi) export, import or customs laws; (vii) anti-terrorism orders, as the same may be renewed, extended, amended or replaced, or any federal, state or local laws, statutes, ordinances, orders, governmental rules, regulations, licensing requirements or policies relating to the same, including, without limitation, Executive Order 13224, effective September 24, 2001; (viii) the USA Patriot Improvement and Reauthorization Act of 2005, its successor statutes or similar statutes in effect from time to time, or the policies promulgated thereunder or any foreign assets control regulations of the United States Treasury Department or any enabling legislation or order relating thereto; (ix) federal or state banking or insurance laws; or, in the case of each of the foregoing, any rules or regulations promulgated thereunder or administrative or judicial decisions with respect thereto.

B. Our opinions are subject to (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally, including, without limitation, fraudulent transfer or fraudulent conveyance

Page 4

laws; (ii) the effect of public policy considerations, statutes or court decisions that may limit rights to obtain exculpation, indemnification or contribution (including, without limitation, indemnification regarding violations of the securities laws and indemnification for losses resulting from a judgment for the payment of any amount other than in United States dollars); (iii) the effect of general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing) and the availability of equitable remedies (including, without limitation, specific performance and equitable relief), regardless of whether considered in a proceeding in equity or at law; and (iv) the possible judicial application of foreign laws or foreign governmental action affecting the rights of creditors generally.

C.    We express no opinion with respect to (i) the truth of the factual representations and warranties contained in the Indemnity Agreement, or (ii) any other document or agreement other than the Indemnity Agreement, regardless of whether such document or agreement is referred to in the Indemnity Agreement.

D.    The enforceability of provisions in the Indemnity Agreement to the effect that terms may not be waived or modified except in writing may be limited under certain circumstances.

E.    We express no opinion with respect to the effect that the introduction of extrinsic evidence as to the meaning of the Indemnity Agreement may have on the opinions expressed herein.

F.    The enforceability of any indemnification obligation contained in Section 2.01 of the Indemnity Agreement may be limited by public policy, statutes, court decisions or by laws limiting the enforceability of provisions exculpating or exempting a party from, or requiring indemnification of a party for, liability of its own action or inaction, to the extent that the action or inaction involves gross negligence, recklessness, willful misconduct or unlawful conduct.

G.    We express no opinion as to (i) Section 4.01 of the Indemnity Agreement insofar as such provision relates to the subject-matter jurisdiction of the United States District Court of the Southern District of New York, (ii) the waiver of inconvenient forum set forth in Section 4.01 of the Indemnity Agreement with respect to proceedings in the United States District Court for the Southern District of New York, (iii) any provision purporting to establish evidentiary standards, or (iv) any document or agreement other than the Indemnity Agreement, regardless of whether such document or agreement is referred to in the Indemnity Agreement.

H.    We express no opinion with respect to the validity, binding effect or enforceability of any provision of the Indemnity Agreement insofar as it purports to effect a choice of governing law or choice of forum for the adjudication of disputes or with respect to the acceptance by a federal court located in the State of New York of jurisdiction of a dispute arising under the Indemnity Agreement, other than (a) the

Page 5

enforceability by a New York State court or a federal court located in the State of New York under New York General Obligations Law Section 5-1401 of the choice of New York State law as the governing law of the Indemnity Agreement (subject, however, to the extent limited by the Constitution of the United States and by Section 1-301 of the Uniform Commercial Code as in effect in the State of New York (the “New York UCC”)) and (b) the enforceability by a New York State court under New York General Obligations Law Section 5-1402 of New York State courts as a non-exclusive forum for the adjudication of disputes with respect to the Indemnity Agreement.

I.    The opinions expressed above relate only to those laws and regulations (other than the Excluded Laws) that, in our experience, are generally applicable to transactions in nature of those contemplated by the Loan Agreement and its ancillary documents, including the Indemnity Agreement, between unregulated parties. Without limitation of the foregoing, we express no opinion as to the effect of, or as to compliance by the Company with, any law or regulation that may be applicable to the transactions contemplated by the Loan Agreement and its ancillary documents, including the Indemnity Agreement, because of the nature of the business conducted by the Company or their respective subsidiaries.

J.    We note that effective enforcement of a foreign currency claim in the courts of the State of New York or U.S. federal courts sitting in the State of New York may be limited by requirements that the claim (or a foreign currency judgment in respect of the claim), or a claim with respect to any guarantee of the claim, be converted into U.S. dollars at the rate of exchange prevailing on the date of the judgment or decree by the New York court or U.S. federal court.

K.    We express no opinion as to the enforceability of (i) any waiver of any applicable defenses, rights of set-off or counterclaim that are not capable of waiver; or (ii) any provision relating to the severability of the provisions in the Indemnity Agreement.

L.    We express no opinion as to the effect on our opinions regarding the Indemnity Agreement arising out of the status of activities of, or laws applicable to the Initial Lender to the Indemnity Agreement (other than the Company under federal laws of the United States of America or laws of the State of New York), and, without limiting the foregoing, we are not expressing any opinion as to the effect of compliance or non-compliance by the Initial Lender with any state or federal laws or regulations applicable to the transactions contemplated by the Loan Agreement and its ancillary documents, including the Indemnity Agreement, because of the nature of any of its businesses.

M.    We express no opinion as to the validity, binding effect or enforceability of (i) any provision of the Indemnity Agreement allowing any party to exercise any remedial rights without notice to the Company, (ii) any provision of the Indemnity Agreement providing for the effectiveness of service of process by mail in any suit, action or proceeding of any nature arising in connection with or in any way relating to

Page 6

any Indemnity Agreement, (iii) any provision of the Indemnity Agreement stating that rights or remedies are not exclusive, that every right or remedy is cumulative and may be exercised in addition to any other right or remedy, that the election of some particular remedy does not preclude recourse to one or more others or that failure to exercise or delay in exercising rights or remedies will not operate as a waiver of any such right or remedy, (iv) any provision of the Indemnity Agreement stating that time is of the essence, (v) any provision of the Indemnity Agreement that constitutes (or is construed to constitute) an agreement to agree or (vi) any rights of setoff asserted by a participant in the rights of the Initial Lender under the Indemnity Agreement.

N.    We express no opinion with respect to (i) the right, title or interest of the Company in or to any property, (ii) the creation or perfection of any security interests or liens or (iii) priority of any security interest or liens.

Without limiting any of the other limitations, exceptions and qualifications stated elsewhere herein (including, without limitation, the qualification set forth in paragraph A with respect to Excluded Laws), we express no opinion with regard to any law other than, as in effect on the date of this opinion letter, (i) the federal laws of the United States of America and (ii) the laws of the State of New York, and we do not express any opinion as to the laws of any other jurisdiction.

This opinion letter deals only with the specified legal issues expressly addressed herein, and you should not infer any opinion that is not explicitly addressed herein from any matter stated in this opinion letter. The opinions expressed herein are to be governed by the law of the State of New York and shall be construed in accordance with the customary practice in New York of lawyers who regularly give, and lawyers who regularly advise opinion recipients regarding, opinions of the kinds contained herein.

This opinion letter is solely for the benefit of the Initial Lender, in connection with the Indemnity Agreement and may not be relied upon by any other person (including any other Lender) for any other purpose, or furnished, assigned, or quoted to any other Person, except that:

(a) at your request, we hereby consent to reliance hereon by any person that becomes a Lender under the Loan Agreement in accordance with the provisions of Sections 2.08(b) or 10.04(b) thereof (each, an “Additional Lender”), on the condition and understanding that (i) this opinion letter speaks only as of the date hereof, (ii) we have no responsibility or obligation to update this opinion letter, to consider its applicability or correctness to any person or entity other than its addressee, or to take into account changes in law, facts or any other developments of which we may later become aware, (iii) any such reliance (x) must be actual and reasonable under the circumstances existing at the time such person becomes an Additional Lender, including any circumstances relating to changes in law, facts or any other developments known to or reasonably knowable by such Additional Lender at such time and (y) can occur only after such Additional Lender’s consultation concerning this opinion letter with counsel

Page 7

experienced in secured lending matters, (iv) our consent to such reliance shall not constitute a reissuance of this opinion letter or otherwise extend any statute of limitations period applicable hereto on the date of this opinion letter, and (v) in no event shall any Additional Lender have any greater rights with respect hereto than the original addressees of this opinion letter; and

(b)    copies of this opinion letter may be disclosed (but may not be relied upon by) (i) to accountants, rating agencies, auditors, counsel and other professional advisors for any Lender on the basis that they make no further disclosure, (ii) to the officers and employees of any Lender on the basis that they make no further disclosure, (iii) in connection with any legal action arising out of or in connection with the transactions contemplated by the Loan Agreement and its ancillary documents, including the Indemnity Agreement, (iv) to any person to whom disclosure is required to be made by applicable law or order of any court or governmental agency or is required or requested pursuant to the rules or regulations of any supervisory or regulatory authority or in connection with any judicial proceedings and (v) to any permitted assignee of or participant in the interest of any Lender under the Indemnity Agreement. The opinions expressed herein are rendered on and as of the date hereof and are not to be deemed to have been reissued or updated by any subsequent delivery of a copy hereof. We assume no obligation to advise you as to any legal development or factual matter arising subsequent to the date hereof that might affect the opinions expressed herein.

Very truly yours,

Exhibit E-2

FORMS OF OPINION OF PERUVIAN COUNSEL TO THE BORROWER

(Attached)

Lima, July 31, 2019

To: The Lenders as defined in the Loan Agreement referred to below

Ladies and Gentlemen:

This opinion is furnished to you pursuant to section 5.03(a)(ii) of the Loan Agreement, dated as of July 31, 2019 (the “Loan Agreement”), by and between Graña y Montero S.A.A. (the “Borrower”), and CS Peru Infrastructure Holdings LLC, as Initial Lender. Capitalized terms used and not otherwise defined herein have the meanings assigned to them in the Loan Agreement.

We have acted as Peruvian counsel to the Borrower in connection with the preparation, execution and delivery of the Opinion Documents (as defined below).

In rendering the opinions expressed below, we have examined executed counterparts of (or copies certified to our satisfaction of) the following documents (the “Opinion Documents”):

(i) the Loan Agreement, including the schedules and exhibits attached thereto;

(ii) the Fee Letter, dated July 31, 2019;

(iii) the First Lien Chilean Share Pledge Agreement, dated July 31, 2019;

(iv) the Second Lien Chilean Share Pledge Agreement, dated July 31, 2019 (together with the First Lien Chilean Share Pledge Agreement, the “Chilean Pledges”);

(v) the Trust Agreement, dated July 31, 2019 (the “Trust Agreement”);

(vi) the form of the Irrevocable Instruction Letter to be delivered by the Peruvian public notary to GyM Ferrovías in accordance with the terms of the Trust Agreement (the “GyM Ferrovías Letter”);

(vii) the form of the Irrevocable Instruction Letter to be delivered by the Peruvian public notary to Norvial, in accordance with the terms of the Trust Agreement (together with the GyM Ferrovías Letter, the “Irrevocable Instruction Letters”);

(viii) the form of a Notification Letter to be delivered by the Peruvian public notary to GMP in accordance with the terms of the Trust Agreement (the “GMP Notification Letter”);

(ix) the form of a Notification Letter to be delivered by the Borrower to Adexus in accordance with the terms of the Trust Agreement (together with the GMP Notification Letter, the “Notification Letters”); and,

(x) Peruvian Note (pagaré) and its corresponding instructions letter, dated July 31, 2019 (acuerdo de llenado) (together with the Trust Agreement, the Irrevocable Instruction Letters and the Notification Letters, the “Peruvian Documents”).

In addition, we have examined (i) the Borrower’s bylaws, as amended and supplemented, its good standing certificate issued by the Peruvian Public Records on July 23, 2019, the power of attorney, dated July 19, 2019, the registry entry of the Borrower’s Electronic File No. 11028652 in the Peruvian Public Records and the certificates of power of attorney, correspondingly, under which the powers of attorney of the Borrower’s representatives to execute the Chilean Pledges are granted, and the powers of attorney of the Borrower’s representatives to execute the other Opinion Documents are registered, respectively; (ii) GMP’s bylaws and its good standing certificate issued by the Peruvian Public Records on July 25, 2019; (iii) GyM Ferrovías’ bylaws and its good standing certificate issued by the Peruvian Public Records July 23, 2019; and (iv) Norvial’s bylaws and its good standing certificate issued by the Peruvian Public Records July 24, 2019. Also, we have carried out the search in the bankruptcy information system (IFCO, its initials in Spanish) through the following link http://servicio.indecopi.gob.pe/e-value/pgw_infoXDeudor.seam.

In our examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals and the conformity with authentic original documents of all documents submitted to us as copies.

In rendering the opinions expressed below, we have assumed (without investigation on our part) that all of the parties to the Opinion Documents (other than the Borrower) are duly organized and validly existing and have the power and authority (corporate, partnership or other) to execute, deliver and perform the Opinion Documents under the laws of the jurisdiction of its organization. Furthermore, we have assumed that:

A.    The execution, delivery and performance by each party (other than the Borrower) of each Opinion Document to which it is a party, (i) are within its corporate or other powers, (ii) do not contravene, or constitute a default under, the certificate of incorporation or bylaws or other constitutive document of such party, (iii) require no action by or in respect of, or filing with, any governmental authority, agency or official that have not been obtained and are in full force and effect and (iv) do not contravene or constitute a default, under any provision of applicable law or regulation or any judgment, injunction, order or decree or any agreement or other instrument binding upon such party;

B.    the Opinion Documents constitute legal, valid, binding and enforceable obligations of all parties to the Opinion Documents (other than the Borrower);

2

C.    the Opinion Documents have been or will be executed by authorized signatories of the parties thereto (other than the Borrower);

D.    Insofar as any obligation established in the Opinion Documents needs to be performed in any jurisdiction outside of Peru, such performance will not be illegal, ineffective or invalid by virtue of the laws of that jurisdiction;

E.    There is a lack of bad faith and absence of fraud, undue influence, coercion or duress on the part of any party to the Opinion Documents, or any obligor, or their respective employees or agents; and,

F.    The Opinion Documents are executed for bona fide commercial reasons by each of the parties thereto.

We are qualified to practice law in Peru, and therefore our opinions set forth below are limited to the laws of Peru, and without limiting the generality of the foregoing, we express no opinion concerning the laws of any other jurisdiction in which any party to any Opinion Document may be located or in which enforcement of any such agreement may be sought which limits the amount of interest that may be legally charged or collected.

Based upon and subject to the foregoing and to the comments and qualifications set forth below, and having considered such questions of law as we have deemed necessary as a basis for the opinions expressed below, we are of the opinion that:

1.    The Borrower (i) is a sociedad anónima abierta duly organized, validly existing and in good standing under the laws of Peru, (ii) is a duly registered company in Peru, (iii) is duly qualified and authorized to do business in Peru, (iv) has all requisite corporate power and authority to own or dispose of the assets and rights expressed to be charged as security by means of the Trust Agreement and the Chilean Pledges in favor of the Lenders and (v) not subject to any bankruptcy, insolvency or liquidation process.

2.    GMP (i) is a sociedad anónima duly organized, validly existing and in good standing under the laws of Peru, (ii) is a duly registered company in Peru, (iii) is duly qualified and authorized to do business in Peru, and (iv) is not subject to any bankruptcy, insolvency or liquidation process.

3.    GyM Ferrovías (i) is a sociedad anónima duly organized, validly existing and in good standing under the laws of Peru, (ii) is a duly registered company in Peru, (iii) is duly qualified and authorized to do business in Peru, and (iv) is not subject to any bankruptcy, insolvency or liquidation process.

4.    Norvial (i) is a sociedad anónima duly organized, validly existing and in good standing under the laws of Peru, (ii) is a duly registered company in Peru, (iii) is duly qualified and authorized to do business in Peru, and (iv) is not subject to any bankruptcy, insolvency or liquidation process.

3

5.    The Borrower (i) has taken all necessary corporate actions and (ii) has granted all necessary corporate powers of attorney and authority, in each case to execute and deliver, and perform all the obligations expressed and assumed by it under, each of the Opinion Documents.

6.    Each of the officers who executed and delivered or will execute and deliver the Opinion Documents is vested with sufficient power and authority to execute and deliver the Opinion Documents on behalf of the Borrower, and such execution, delivery and performance thereof will not (a) conflict with or constitute or result in a breach of or a default under (or an event that with notice or the passage of time or both would constitute a default or an event of default under), or a violation of any of (i) each of the Borrower’s, GMP’s, GyM Ferrovías’ and Norvial’s by-laws or other constitutive documents; (ii) the laws, rules or regulations of Peru; (iii) any order, judgement, decree or award known to us; or (iv) the terms or provisions of any material contract or instrument binding on or affecting the Borrower, or any of its assets and rights expressed to be charged as security by means of the Trust Agreement and the Chilean Pledges in favor of the Lenders, known to us; or (b) result in or require the creation or imposition of any lien, charge or encumbrance upon or with respect to any of the properties or assets of the Borrower (except for the security trust created pursuant to the Trust Agreement). The Opinion Documents contain no provision which is contrary to Peruvian public policy, or Peruvian national sovereignty, or for which would not be upheld in the courts of Peru, subject to the conditions set forth in Section 11 (b) of this opinion.

7.    Each of the Opinion Documents (other than the Irrevocable Instruction Letters and the Notification Letters) have been duly authorized, executed and delivered by the Borrower, and constitute legal, valid, binding and enforceable obligations of the Borrower in accordance with its terms, except for (i) limitations that may arise from bankruptcy, reorganization, insolvency, fraudulent transfer, fraudulent conveyance, moratorium and similar laws of general applicability relating to or affecting creditors’ rights, and (ii) application of article 2049 of the Peruvian Civil Code under which provisions of foreign law shall be excluded if they are incompatible with international public policy or incompatible with good morals. We have no reason to believe that any of the limitations of article 2049 of the Peruvian Civil Code apply in the case of the applicable Opinion Documents.

8.    Each of the Irrevocable Instruction Letters and each of the Notification Letters have been duly authorized by the Borrower and, when executed by a duly authorized representative of the Borrower in the applicable form attached to the Trust Agreement and (i) in the case of each of the Irrevocable Instruction Letters and the Notification Letter in respect of GMP, delivered by the Peruvian public notary, and (ii) in the case of the Notification Letter in respect of Adexus, delivered by the Borrower, each of the Irrevocable Instruction Letters and each of the Notification Letters will constitute legal, valid, binding and enforceable obligations of the Borrower in accordance with its terms, except for limitations that may arise from bankruptcy, reorganization, insolvency, fraudulent transfer, fraudulent conveyance, moratorium and similar laws of general applicability relating to or affecting creditors’ rights.

4

9.    Each Peruvian Note and its corresponding instruction letter meet the requirements to be considered valid and effective pagarés incompletos in accordance with Law No. 27287 (Ley de Títulos Valores) (as amended), and (i) constitutes a legal, valid and binding obligation of the Borrower and (ii) entitle the holder of such Peruvian Note to initiate a proceso único de ejecución before the competent courts in Peru against the Borrower, in accordance with the Peruvian Code of Civil Procedure (Código Procesal Civil), for the enforcement thereof; provided that, each Peruvian Note is completed in accordance with the provisions of its corresponding instructions letter, as set forth by Article 10 of the Peruvian Securities Act Law No. 27287 (Ley de Títulos Valores).

10.    The Trust Agreement is legal, valid and binding to the parties thereon and creates a valid, first priority security interest in favor of the Lender, constituting an estate separate from the estate of the Borrower in accordance with its terms, pursuant to which valid and enforceable first priority Liens have been created under Peruvian law over the assets and rights expressed to be charged as security thereby in favor of the Lenders, and with respect to the “Derechos de Cobro Venta Adexus”, “Flujos Dinerarios Venta Adexus”, “Derechos de Cobro Dividendos Adexus” and “Flujos Dinerarios Dividendos Adexus” (as defined in the Trust Agreement) the first priority lien will be created upon the satisfaction in full of the conditions established in the second additional clause and the third additional clause to the Trust Agreement, respectively. In order for the Trust Agreement to be considered enforceable against third parties (i.e. erga omnes) it shall be recorded in the Peruvian Public Registries (Registro Mobiliario de Contratos), and no further action is required for the enforceability against third parties of the Trust Agreement.

11.    The Opinion Documents are in proper legal form for the enforcement thereof under Peruvian laws, and other than the Trust Agreement, for which its registration in the Peruvian Public Registries (Registro Mobiliario de Contratos) is required in order for it to be enforceable against third parties; there are no authorizations, consents, licenses, validations, filings, notices, recordings, registrations or approvals required from any court, arbitrator or other Governmental Authority of Peru for the entry into and delivery of, and the performance by the Borrower of its obligations under, the Opinion Documents, or to ensure the legality, validity or enforceability of the Opinion Documents.

12.    It is not necessary that documentary stamp or similar tax, imposition or charge be paid in Peru on or in respect of any Opinion Document in order to ensure the legality, validity, enforceability or admissibility into evidence of such Opinion Document in Peru.

13.    Under Peruvian conflict of law principles, the choice of New York law as the governing law for each of the Loan Agreement, the Fee Letter and each NY Note would be upheld as a valid choice of law by the courts of Peru and will be honored by the courts of Peru and such document will be construed in accordance with, and will be treated as being governed by New York law, except for the limitations contained in article 2049 of the Peruvian Civil Code, under which provisions of foreign law shall be excluded if they are incompatible with international public policy or incompatible with good morals, and article 2088 of the Peruvian Civil Code, under which the creation, content and extinction of security interests on tangible assets located in Peru is governed by Peruvian law. We have no reason to believe that article 2049 or article 2088 of the Peruvian Civil Code is being violated in connection with the Opinion Documents.

5

(a) The submission by the Borrower in each of the Loan Agreement, the Fee Letter and each NY Note to the jurisdiction of the courts of the State of New York sitting in New York County, and of the United States District Court for the Southern District of New York, and any appellate court from any thereof, is legal, valid, binding and enforceable under the laws of Peru –after undergoing the recognition procedure explained in (b) below, except as for the cases specified in Article 2058, paragraph (i) and article 2060 of the Peruvian Civil Code, which provide that legal proceedings related to real estate property located in the territory of Peru are subject to the exclusive jurisdiction of Peruvian courts and that the submission to a foreign jurisdiction is enforceable in Peru if such submission is not an abuse of law and is not contrary to public policy. We have no reason to believe that such submissions would be an abuse of law or contrary to public policy.

(b) A final judgment against the Borrower for the payment of money obtained from the New York State courts in New York, or federal courts of the United States of America sitting in the Southern District of New York (including pursuant to service of process on an agent of the Borrower) would be recognized, conclusive and enforceable in the courts of Peru without reconsideration on the merits; provided that the following requirements are met:

i. if there is a treaty between Peru and the United States of America regarding the enforceability of foreign judgments, and the provisions of such treaty are complied with. Currently, there is no such treaty;

ii. in the absence of a treaty, the reciprocity rule applies, such reciprocity being presumed, under which a judgment given by a foreign competent court will be admissible in the Peruvian courts and will be enforceable thereby, except if according to such foreign law (A) judgments issued by Peruvian courts are not admissible in such foreign country or (B) judgments issued by Peruvian courts are subject to re-examination by such foreign competent court of the issues dealt with therein; and

iii. in any case, (A) such judgment does not resolve matters which are subject to the exclusive jurisdiction of Peruvian courts (i.e. in rem rights related to real estate property located in Peru, civil actions derived from criminal offences in, or with effects in, Peru, and agreements in which the parties have expressly or implicitly submitted to Peruvian jurisdiction); (B) the foreign competent court issuing the judgment holds jurisdiction under the rules of international conflicts of law and general principles of international procedural jurisdiction; (C) the defendant against whom the enforcement is sought has been summoned in accordance with the laws of the place in which the action was brought and a reasonable time to appear before the foreign court as well as due procedural guarantees to defend his/her/its

6

case was granted to the defendant; (D) the foreign judgment has the authority of res judicata under the laws of such foreign jurisdiction; (E) there are no pending legal proceedings between the same parties which relate to the same matters, started prior to the filing of the complaint that concluded with such foreign judgment; (F) such foreign judgment is not incompatible with other judgments which meet the admissibility and enforceability requirements established by Peruvian law which have been previously issued with respect to the same subject matter; (G) such foreign judgment is not contrary to public policy or good morals; (H) it is not proven that such foreign court denies enforcement of Peruvian judgments or engages in a review of the merits thereof; and (I) an exequatur proceeding under Peruvian law for the recognition and enforcement of the foreign court judgment must be followed.

14.    The obligations of the Borrower with respect to each Lender under each Opinion Document will rank at all times at least pari passu in priority of payment with respect to all existing and future senior, unsubordinated indebtedness of the Borrower, except for indebtedness and other obligations of the Borrower held by those whose claims are preferred upon the occurrence of any bankruptcy, insolvency or liquidation to the extent required by the terms of Law No. 27809 (Ley General del Sistema Concursal), as amended.

15.    Neither the Borrower nor any of its property enjoy any right of immunity from set-off, suit or execution with respect to assets or obligations under each of the Opinion Documents. The Borrower is subject to civil and commercial law with respect to its respective obligations under the Opinion Documents and the execution and delivery of, and performance by the Borrower under, the Opinion Documents constitutes private and commercial acts rather than public or governmental acts.

16.    The Lenders will not be deemed to be resident, domiciled or carrying on business in Peru by reason only of the execution, performance and/or enforcement of the Opinion Documents.

17.    The Lenders do not need to be licensed, qualified or otherwise entitled by any Governmental Authority of Peru or be entitled to carry out business in any jurisdiction within Peru (i) in order to enforce any of their rights or remedies under any of the Opinion Documents, or (ii) solely by reason of the execution, delivery and performance of any of the Opinion Documents.

18.    The Borrower’s representatives are duly vested with sufficient power and authority to appoint and empower the Process Agent in the manner set forth in the Loan Agreement, the Fee Letter and each NY Note, insofar as matters of Peruvian law are considered.

19.    Except for the obligation with respect to (a) the withholding of income tax (Impuesto a la Renta) at a rate of 30% or 4.99%, as the case may be, on interest, fees, commissions, premiums and any other amounts paid by the Borrower (as applicable) to non-resident

7

Lenders under the Opinion Documents; and (b) the Peruvian Financial Transactions Tax (Impuesto a las Transacciones Financieras) that applies to each debit and credit operation in an account with an entity that is part of the Peruvian financial system and certain organized payment systems at a rate of 0.005%, there is presently no tax, duty, levy, impost, deduction, fee, charge, registration or transfer tax, including, without limitation, any withholding imposed by Peru (or any political subdivision or taxing authority thereof or therein): (x) on or by virtue of the execution, delivery or performance by the Borrower of the Opinion Documents, (y) for the enforcement or admissibility into evidence of the Opinion Documents or (z) on or as a result of payments in the manner contemplated in the Loan Agreement, under each Peruvian Note or pursuant to any other Opinion Document to the Lenders.

20.    There are no Peruvian foreign exchange control consents, licenses or approvals required for the entry into and performance by the Borrower of its obligations under the Opinion Documents (including, without limitation, the payment of all monies to the Lenders in accordance with the Opinion Documents).

Our opinions are subject to the following qualifications:

A.    The opinions set forth in this opinion are based upon the facts in existence and laws in effect as of the date hereof, we do not express any opinion as to the laws of any other jurisdiction and we expressly disclaim any obligation to update our opinions herein with respect to any changes in such facts or laws that may come to our attention after the delivery of this opinion.

B.    Enforceability of each of the Peruvian Documents may be limited by bankruptcy, insolvency, fraudulent transfer, fraudulent conveyance, liquidation, moratorium or other similar laws relating to or affecting the rights and remedies of creditors generally, by equitable principles, including, without limitation, principles regarding good faith and fair dealing, and by any principles of public policy and good morals in Peru.

This opinion is furnished to the addressees hereof, by us as Peruvian counsel to the Borrower, in connection with the transactions contemplated in the Opinion Documents, and may not be relied upon by any person for a purpose other than in connection with such transactions contemplated in the Opinion Documents without, in each instance, our prior written consent, except that any person that becomes a Lender under the Loan Agreement in accordance with the provisions of Sections 2.08(b) or 10.04(b) thereof may rely on this opinion as if it were specifically addressed and delivered to such person on the date hereof. You or any successor or assign may provide a copy of this opinion, for informational purposes only, and not for reliance, (i) to any person to whom disclosure is required to be made by applicable law or order of any court or governmental agency or is required or requested pursuant to the rules or regulations of any supervisory or regulatory authority or in connection with any judicial proceedings, (ii) to the officers, employees, rating agencies, auditors and professional advisers of the addressee, (iii) in connection with any legal action to which any Lender or Related Party is a party arising out of the transactions contemplated by the Opinion Documents and (iv) to any permitted assignee of or participant in the interest of any Lender

8

under the Opinion Documents; on the basis that (a) such disclosure is made solely to enable any such person to be informed that an opinion has been given and to be made aware of its terms but not for the purposes of reliance, and (b) we do not assume any duty or liability to any person to whom such disclosure is made and in preparing this opinion we only had regard to the interests of our client.

Very truly yours,

Philippi, Prietocarrizosa, Ferrero DU & Uría.

9

Lima, July 31, 2019

To: The Lenders as defined in the Indemnification Agreement referred to below

Ladies and Gentlemen:

This opinion letter is furnished to you in connection with the Indemnification Agreement, dated as of July 31, 2019 (the “Indemnification Agreement”), by and between Graña y Montero S.A.A. (the “Company”), and CS Peru Infrastructure Holdings LLC, as Initial Lender. Capitalized terms used and not otherwise defined herein have the meanings assigned to them in the Indemnification Agreement.

We have acted as Peruvian counsel to the Company in connection with the preparation, execution and delivery of the Opinion Document (as defined below).

In rendering the opinions expressed below, we have examined executed counterparts of (or copies certified to our satisfaction of) the Indemnification Agreement (the “Opinion Document”).

In addition, we have examined the Company’s bylaws, as amended and supplemented, its good standing certificate issued by the Peruvian Public Records on July 23, 2019, and the registry entry 11028652 of the Company’s Electronic File in the Peruvian Public Records, under which the powers of attorney of the Company’s representatives to execute the Opinion Document are registered. Also, we have carried out the search in the bankruptcy information system (IFCO, its initials in Spanish) through the following link http://servicio.indecopi.gob.pe/e-value/pgw_infoXDeudor.seam.

In our examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals and the conformity with authentic original documents of all documents submitted to us as copies.

In rendering the opinions expressed below, we have assumed (without investigation on our part) that all of the parties to the Opinion Document (other than the Company) are duly organized and validly existing and have the power and authority (corporate, partnership or other) to execute, deliver and perform the Opinion Document under the laws of the jurisdiction of its organization. Furthermore, we have assumed that:

A.    The execution, delivery and performance by each party (other than the Company) of the Opinion Document, (i) are within its corporate or other powers, (ii) do not contravene, or constitute a default under, the certificate of incorporation or bylaws or other constitutive document of such party, (iii) require no action by or in respect of, or filing with, any governmental authority, agency or official that have not been obtained and are in full

force and effect and (iv) do not contravene or constitute a default, under any provision of applicable law or regulation or any judgment, injunction, order or decree or any agreement or other instrument binding upon such party;

B.    The Opinion Document constitutes legal, valid, binding and enforceable obligations of all parties to the Opinion Document (other than the Company);

C.    The Opinion Document has been executed by authorized signatories of the parties to it (other than the Company);

D.    Insofar as any obligation established in the Opinion Document needs to be performed in any jurisdiction outside of Peru, such performance will not be illegal, ineffective or invalid by virtue of the laws of that jurisdiction;

E.    There is a lack of bad faith and absence of fraud, undue influence, coercion or duress on the part of any party to the Opinion Document, or any obligor, or their respective employees or agents; and,

F.    The Opinion Document is executed for bona fide commercial reasons by each of the parties to it.

We are qualified to practice law in Peru, and therefore our opinions set forth below are limited to the laws of Peru, and without limiting the generality of the foregoing, we express no opinion concerning the laws of any other jurisdiction in which any party to the Opinion Document may be located or in which enforcement of such agreement may be sought which limits the amount of interest that may be legally charged or collected.

Based upon and subject to the foregoing and to the comments and qualifications set forth below, and having considered such questions of law as we have deemed necessary as a basis for the opinions expressed below, we are of the opinion that:

1.    The Company (i) is a sociedad anónima abierta duly organized, validly existing and in good standing under the laws of Peru, (ii) is a duly registered company in Peru, (iii) is duly qualified and authorized to do business in Peru, and (iv) is not subject to any bankruptcy, insolvency or liquidation process.

2.    The Company (i) has taken all necessary corporate actions and (ii) has granted all necessary corporate powers of attorney and authority, in each case to execute and deliver, and perform all the obligations expressed and assumed by it under the Opinion Document.

3.    Each of the officers who executed and delivered the Opinion Document is vested with sufficient power and authority to execute and deliver the Opinion Document on behalf of the Company, and such execution, delivery and performance thereof will not (a) conflict with or constitute or result in a breach of or a default under (or an event that with notice or the passage of time or both would constitute a default or an event of default under),

2

or a violation of any of (i) the Company’s bylaws or other constitutive documents, (ii) the laws, rules or regulations of Peru, (iii) any order, judgement, decree or award known to us, or (iv) the terms or provisions of any material contract or instrument binding on or affecting the Company known to us; or (b) result in or require the creation or imposition of any lien, charge or encumbrance upon or with respect to any of the properties or assets of the Company. The Opinion Document contains no provision which is contrary to Peruvian public policy, or Peruvian national sovereignty, or for which would not be upheld in the courts of Peru, subject to the conditions set forth in Section 7(b) of this opinion.

4.    The Opinion Document has been duly authorized, executed and delivered by the Company, and constitutes a legal, valid, binding and enforceable obligation of the Company in accordance with its terms, except for (i) limitations that may arise from bankruptcy, reorganization, insolvency, fraudulent transfer, fraudulent conveyance, moratorium and similar laws of general applicability relating to or affecting creditors’ rights, and (ii) application of Article 2049 of the Peruvian Civil Code under which provisions of foreign law shall be excluded if they are incompatible with international public policy or incompatible with good morals. We have no reason to believe that any of the limitations of Article 2049 of the Peruvian Civil Code apply in the case of the Opinion Document.

5.    The Opinion Document is in proper legal form for the enforcement thereof under Peruvian laws, and there are no authorizations, consents, licenses, validations, filings, notices, recordings, registrations or approvals required from any court, arbitrator or other Governmental Authority of Peru for the entry into and delivery of, and the performance by the Company of its obligations under, the Opinion Document, or to ensure the legality, validity or enforceability of the Opinion Document.

6.    It is not necessary that documentary stamp or similar tax, imposition or charge be paid in Peru on or in respect of the Opinion Document in order to ensure the legality, validity, enforceability or admissibility into evidence of the Opinion Document in Peru.

7.    Under Peruvian conflict of law principles, the choice of New York law as the governing law for the Opinion Document would be upheld as a valid choice of law by the courts of Peru and will be honored by the courts of Peru and such document will be construed in accordance with, and will be treated as being governed by New York law, except for the limitations contained in Article 2049 of the Peruvian Civil Code, under which provisions of foreign law shall be excluded if they are incompatible with international public policy or incompatible with good morals, and Article 2088 of the Peruvian Civil Code, under which the creation, content and extinction of security interests on tangible assets located in Peru is governed by Peruvian law. We have no reason to believe that article 2049 or article 2088 of the Peruvian Civil Code is being violated in connection with the Opinion Document.

(a)    The submission by the Company in the Opinion Document to the jurisdiction of the courts of the State of New York sitting in New York County, and of the United States District Court for the Southern District of New York, and any appellate court from any thereof, is legal, valid, binding and enforceable under the laws of Peru –after undergoing the recognition procedure explained in (b) below,

3

except as for the cases specified in Article 2058, paragraph (i) and Article 2060 of the Peruvian Civil Code, which provide that legal proceedings related to real estate property located in the territory of Peru are subject to the exclusive jurisdiction of Peruvian courts and that the submission to a foreign jurisdiction is enforceable in Peru if such submission is not an abuse of law and is not contrary to public policy. We have no reason to believe that such submissions would be an abuse of law or contrary to public policy.

(b)    A final judgment against the Company for the payment of money obtained from the New York State courts in New York, or federal courts of the United States of America sitting in the Southern District of New York (including pursuant to service of process on an agent of the Company) would be recognized, conclusive and enforceable in the courts of Peru without reconsideration on the merits; provided that the following requirements are met:

i. if there is a treaty between Peru and the United States of America regarding the enforceability of foreign judgments, and the provisions of such treaty are complied with. Currently, there is no such treaty;

ii. in the absence of a treaty, the reciprocity rule applies, such reciprocity being presumed, under which a judgment given by a foreign competent court will be admissible in the Peruvian courts and will be enforceable thereby, except if according to such foreign law (A) judgments issued by Peruvian courts are not admissible in such foreign country or (B) judgments issued by Peruvian courts are subject to re-examination by such foreign competent court of the issues dealt with therein; and

iii. in any case, (A) such judgment does not resolve matters which are subject to the exclusive jurisdiction of Peruvian courts (i.e. in rem rights related to real estate property located in Peru, civil actions derived from criminal offences in, or with effects in, Peru, and agreements in which the parties have expressly or implicitly submitted to Peruvian jurisdiction); (B) the foreign competent court issuing the judgment holds jurisdiction under the rules of international conflicts of law and general principles of international procedural jurisdiction; (C) the defendant against whom the enforcement is sought has been summoned in accordance with the laws of the place in which the action was brought and a reasonable time to appear before the foreign court as well as due procedural guarantees to defend his/her/its case was granted to the defendant; (D) the foreign judgment has the authority of res judicata under the laws of such foreign jurisdiction; (E) there are no pending legal proceedings between the same parties which relate to the same matters, started prior to the filing of the complaint that concluded with such foreign

4

judgment; (F) such foreign judgment is not incompatible with other judgments which meet the admissibility and enforceability requirements established by Peruvian law which have been previously issued with respect to the same subject matter; (G) such foreign judgment is not contrary to public policy or good morals; (H) it is not proven that such foreign court denies enforcement of Peruvian judgments or engages in a review of the merits thereof; and (I) an exequatur proceeding under Peruvian law for the recognition and enforcement of the foreign court judgment must be followed.

8.    The obligations of the Company with respect to each Lender under the Opinion Document will rank at all times at least pari passu in priority of payment with respect to all existing and future senior, unsubordinated indebtedness of the Company, except for indebtedness and other obligations of the Company held by those whose claims are preferred upon the occurrence of any bankruptcy, insolvency or liquidation to the extent required by the terms of Law No. 27809 (Ley General del Sistema Concursal), as amended.

9.    Neither the Company nor any of its property enjoys any right of immunity from set-off, suit or execution with respect to obligations under the Opinion Document. The Company is subject to civil and commercial law with respect to its obligations under the Opinion Document and the execution and delivery of, and performance by the Company under, the Opinion Document constitutes private and commercial acts rather than public or governmental acts.

10.    The Lenders will not be deemed to be resident, domiciled or carrying on business in Peru by reason only of the execution, performance and/or enforcement of the Opinion Document.

11.    The Lenders do not need to be licensed, qualified or otherwise entitled by any Governmental Authority of Peru or be entitled to carry out business in any jurisdiction within Peru (i) in order to enforce any of their rights or remedies under the Opinion Document, or (ii) solely by reason of the execution, delivery and performance of the Opinion Document.

12.    The Company’s representatives are duly vested with sufficient power and authority to appoint and empower the Process Agent in the manner set forth in the Loan Agreement and the Opinion Document insofar as matters of Peruvian law are considered.

13.    Except for the obligation with respect to the Peruvian Financial Transactions Tax (Impuesto a las Transacciones Financieras) that applies to each debit and credit operation in an account with an entity that is part of the Peruvian financial system and certain organized payment systems at a rate of 0.005%, there is presently no tax, duty, levy, impost, deduction, fee, charge, registration or transfer tax, including, without limitation, any withholding imposed by Peru (or any political subdivision or taxing authority thereof or therein): (x) on or by virtue of the execution, delivery or performance by the Company of the Opinion Document, (y) for the enforcement or admissibility into evidence of the Opinion Document or (z) on or as a result of payments in the manner contemplated in the Opinion Document to the Lenders.

14.    There are no Peruvian foreign exchange control consents, licenses or approvals required for the entry into and performance by the Company of its obligations under the Opinion Document (including, without limitation, the payment of all monies to the Lenders in accordance with the Opinion Document).

5

Our opinions are subject to the following qualification: The opinions set forth in this opinion letter are based upon the facts in existence and laws in effect as of the date hereof, we do not express any opinion as to the laws of any other jurisdiction and we expressly disclaim any obligation to update our opinions herein with respect to any changes in such facts or laws that may come to our attention after the delivery of this opinion letter.

This opinion letter is furnished to the addressees hereof, by us as Peruvian counsel to the Company, in connection with the transaction contemplated in the Opinion Document, and may not be relied upon by any person for a purpose other than in connection with such transaction contemplated in the Opinion Document without, in each instance, our prior written consent, except that any person that becomes a Lender under the Opinion Document may rely on this opinion letter as if it were specifically addressed and delivered to such person on the date hereof. You or any successor or assign may provide a copy of this opinion letter, for informational purposes only, and not for reliance, (i) to any person to whom disclosure is required to be made by applicable law or order of any court or governmental agency or is required or requested pursuant to the rules or regulations of any supervisory or regulatory authority or in connection with any judicial proceedings, (ii) to the officers, employees, rating agencies, auditors and professional advisers of the addressee, (iii) in connection with any legal action to which any Lender or Related Party is a party arising out of the transaction contemplated by the Opinion Document and any Credit Document and (iv) to any permitted assignee of or participant in the interest of any Lender under the Opinion Document; on the basis that (a) such disclosure is made solely to enable any such person to be informed that an opinion letter has been given and to be made aware of its terms but not for the purposes of reliance, and (b) we do not assume any duty or liability to any person to whom such disclosure is made and in preparing this opinion letter we only had regard to the interests of our client.

Very truly yours,

Philippi, Prietocarrizosa, Ferrero DU & Uría.

6

Exhibit E-3

FORM OF OPINION OF CHILEAN COUNSEL TO THE BORROWER

(Attached)

Santiago, July 31, 2019

To CS Peru Infrastructure Holdings LLC as Initial Lender (as defined below) and any other financial institutions party to the Loan Agreement from time to time as Lenders (as defined in the Loan Agreement referred to below).

Dear Sirs:

We have acted as special Chilean counsel to Graña y Montero S.A.A. (the “Borrower”) in connection with the New York law governed loan agreement, dated as of July 31, 2019, entered into by and among the Borrower and CS Peru Infrastructure Holdings LLC (the “Initial Lender”) and any other financial institutions party thereto from time to time as Lenders (the “Loan Agreement”).

This legal opinion is being provided pursuant to Section 5.03(a)(iii) of the Loan Agreement. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Loan Agreement.

In connection with the opinions expressed herein, we have examined originals or certified copies or otherwise identified to our satisfaction the following documents:

(a) The Loan Agreement, including all schedules and exhibits annexed thereto;

(b) The first lien Chilean pledge without conveyance over the shares of Adexus S.A. (the “Company”) granted by the Borrower, dated as of July 31, 2019 (the “First Lien Chilean Pledge”);

(c) The second lien Chilean pledge without conveyance over the shares of the Company, granted by the Borrower, dated as of July 31, 2019 (the “Second Lien Chilean Pledge” and together with the First Lien Chilean Pledge, the “Opinion Documents”);

(d) The pledge over 37,929 shares of the Company, granted by the Borrower in favor of Ameris Deuda Directa Fondo de Inversión and Fondo de Inversión Falcom Chilean Fixed Income pursuant to the pledge agreement over shares (contrato de prenda mercantil), dated as of August 17, 2018 (the “Company’s Financing Lien”);

(e) The letter dated July 26, 2019, by which Ameris Deuda Directa Fondo de Inversión and Fondo de Inversión Falcom Chilean Fixed Income authorized the Borrower to grant the Second Lien Chilean Pledge in favor of the Lenders, under the terms and conditions indicated therein.

(f) The power of attorney of the Borrower granted in Peru by public deed, dated July 19, 2019 before the notary public Luis Dannon Brender, and the power of attorney of the Company granted in Chile by public deed, dated July 12, 2017 and June 10, 2019, in each case, before the notary public Myriam Amigo Arancibia, which authorizes the execution and delivery of, and performance under, the Opinion Documents; and

1

(g) (i) The constituting organizational deeds (estatutos) and By-Laws of the Company (“Organizational Documents”), (ii) the shareholders registry of the Company, (iii) a registration certificate (Certificado de Vigencia) of the Company, dated as of July 23, 2019, issued by the Conservador de Bienes Raíces de Santiago, and (iv) a certificate of the Superintendencia de Insolvencia y Reemprendimiento of the Company, dated July 25, 2019.

In rendering the opinions expressed below, we have assumed without verification: (i) the authenticity of all documents and records submitted to us as originals and the conformity to the originals of all documents and records submitted to us as copies, (ii) the authenticity and genuineness of all signatures on the documents reviewed by us in connection therewith, (iii) the due organization and existence of each of the parties to the Opinion Documents (except for the Company), (iv) the due authorization, execution and delivery of the Opinion Documents by the parties thereto (except for the Company) and that each such party has adequate power, authority and legal right to enter into the Opinion Documents to which it is a party (except for the Company), and (v) that any document which is governed by a law other than Chilean law is valid, binding and enforceable under such other law and that there is nothing in any such laws that affects our opinions.

Based upon the foregoing, and subject to the assumptions and qualifications contained herein, we are of the opinion that:

1.    The Company is a stock company (sociedad anonima cerrada) which has been duly incorporated and is validly existing under the laws of the Republic of Chile, with full power and authority to carry on its business and own, lease and operate its properties within the limits of its corporate objects stated in its articles of incorporation.

2.    The Company does not appear on the Bankruptcy Registry of Superintendencia de Insolvencia y Reemprendimiento, and it is not currently subject to a bankruptcy procedure of liquidation, reorganization or renegotiation, in accordance with the publications registered in the Bankruptcy Gazette.

3.    As of the date hereof, the authorized capital stock of the Company consists of 334,500 shares, of which (i) 334,499 shares have been subscribed for by the Borrower, and (ii) one share has been subscribed for by Concar S.A. Each share is entitled to one vote with respect to the appointment of each Person proposed to serve on the board of directors of the Company and all other matters requiring a shareholders’ vote under the laws of the Republic of Chile. Except for the liens created pursuant to (i) the Company’s Financing Lien, (ii) the First Lien Chilean Pledge in favor of the Lenders, (iii) the Second Lien Chilean Pledge in favor of the Lenders, and (iv) the Trust Agreement, dated as of July 31, 2019, no Person has any shares, any rights to receive distributions of the Company’s assets, any rights, benefits or privileges pertaining to any of the foregoing (including, without limitation, voting rights and the right to participate in the management of the Company) or any other Equity Interest in the Company as disclosed and registered in the Shareholders Registry of the Company.

4.    According to the certificates issued by the Servicio de Registro Civil e Identificación (Civil Registry and Identification Service) on July 26, 2019, in the case of the

2

Borrower, there are no pledges registered in the Registro de Prendas sin Desplazamiento (Pledges Without Conveyance Registry) kept by such Service against the assets of the Borrower, other than those granted in favor of the Lenders for the benefit of the Lenders and the Company’s Financing Lien.

5.    Once the obligations secured by the Company’s Financing Lien are paid in full, the second rank lien granted by the Borrower pursuant to the Second Lien Chilean Pledge in favor of the Lenders will become, automatically, a first rank lien over 37,929 shares of the Company owned by the Borrower in favor of the Lenders, upon the release of the Second Lien Chilean Pledge.

6.    Each of the Borrower and the Company have all the requisite corporate power and authority to execute, deliver and perform its obligations under the Opinion Documents and to consummate the transactions contemplated thereby.

7.    The execution and delivery by the Borrower and the Company of the Opinion Documents and the performance by each of them of their respective obligations pursuant to such documents and the consummation of the transactions contemplated thereby do not and will not conflict with or constitute or result in a breach of or a default under (or an event that with notice or the passage of time or both would constitute a default or an event of default under), or a violation of any of (i) the Organizational Documents; or (ii) the laws, rules or regulations of the Republic of Chile.

8.    Each of the Opinion Documents have been duly authorized, executed and delivered by the Company, and constitute legal, valid, binding and enforceable obligations of the Borrower and the Company in accordance with its terms, once the Opinion Documents have been registered as indicated in No. 10(a).

9.    Neither (i) the negotiation, preparation or execution of, or the enforcement by the Lenders of its respective rights under the Opinion Documents, nor (ii) the performance by any party to the Opinion Documents of its obligations thereunder, does or will, by itself or collectively, require the Lenders to be licensed, qualified or otherwise registered or entitled to carry on business in the Republic of Chile.

10.    The Opinion Documents are in proper legal form for the enforcement thereof in the courts of the Republic of Chile. To ensure the legality, validity, enforceability or admissibility into evidence in the Republic of Chile of the Opinion Documents, it is not necessary that the Opinion Documents or any other document be filed or recorded with any governmental authority of the Republic of Chile other than: (a) the notarization of the signatures of the Opinion Documents by a Chilean Notary Public and the registration of the Opinion Documents with the Pledges without Conveyance Registry (Registro de Prendas sin Desplazamiento), and (b) the notarization of a copy of the Loan Agreement with a Chilean Notary Public (as part of the Opinion Documents granting process). To ensure the legality, validity and enforceability of the declaration deed contemplated by the Opinion Documents to pledge the Borrower’s future Equity Interests (including economic ownership interests and voting rights) in the Company, it will also be necessary to undergo the diligences indicated under letters (a) and (b).

3

11.    Once perfected as per No. 10 above, the Opinion Documents will create a valid and perfected first and, solely with respect to the Second Lien Chilean Pledge, second rank security interest, as applicable, in the collateral included therein as security for the obligations described therein, subject to no other equal or prior security interest other than certain obligations pursuant to Article 2472 of the Chilean Civil Code which are entitled to statutory priorities under the laws of the Republic of Chile (which include among others (i) judicial costs incurred for the general benefit of creditors, (ii) other liquidation expenses, (iii) remunerations of workers and family allowances, (iv) social security contributions, (v) tax withholdings and surcharges, (vi) workers severance payments and (vii) other preferences which are of similar nature and are entitled to statutory priorities under the laws of the Republic of Chile, in each case enforceable as such in the Republic of Chile against the grantor thereof and against any veedores, liquidadores or interventores in insolvency, reorganization or liquidation proceedings, any attaching creditor and all other third parties, in accordance with its terms.

The foreclosure of the Opinion Documents together with the titulo ejecutivo shall be made upon judicial enforcement of the Opinion Documents, and therefore, the parties secured thereby would only be entitled to the proceeds of the liquidation of the respective shares, to the extent allocable to the pledged ownership interests.

12.    Neither the Company nor any of its respective property has any immunity from the jurisdiction of any court of the Republic of Chile or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under the laws of the Republic of Chile in respect of its obligations under the Opinion Documents.

The foregoing opinion is subject to the following additional qualifications:

(i) the enforceability of the Opinion Documents are subject to applicable bankruptcy, insolvency, liquidation, reorganization, moratorium and similar laws now or hereafter in effect affecting the enforcement of creditors’ rights generally;

(ii) the opinions expressed in this opinion letter are limited to questions arising under the law of the Republic of Chile, and we do not purport to express an opinion on any question arising under the laws of any other jurisdiction; and

(iii) the opinions expressed in this opinion letter refer only as of the date hereof. We expressly disclaim any responsibility to advise you of any development or circumstance of any kind including any change of law or fact that may occur after the date of this opinion letter even though such development, circumstance or change may affect the legal analysis, a legal conclusion or any other matter set forth in or relating to this opinion letter. Accordingly, any person relying on this opinion letter at any time after the date hereof should seek advice of its counsel as to proper application of this opinion letter at such time.

This opinion letter is addressed to and is solely for the benefit of the Lenders as at the date of this opinion letter and any person that becomes a Lender under the Loan Agreement in accordance with the provisions of Sections 2.08(b) or 10.04(b) thereof after the date of this opinion letter. It may not, without our prior written consent, be relied upon for any

4

other purpose or be disclosed to or relied upon by any other person save that it may be disclosed by any Lender without such consent to:

(a)    any person to whom disclosure is required to be made by applicable law or order of any court or governmental agency or is required or requested pursuant to the rules or regulations of any supervisory or regulatory body or in connection with any judicial proceedings;

(b)    bank examiners and other regulatory authorities should they so request in connection with their normal examinations;

(c)    the officers, employees, auditors and professional advisers of any addressee; (d) in connection with any legal action to which any Lender or Related Party is a party arising out of the transactions contemplated by the Loan Agreement and/or the Opinion Documents;

(e)    any affiliate, assignee or participant in the interest of any addressee under the Credit Documents, and the officers, employees, auditors and professional advisers of such affiliate, assignee or participant; and

(f)    any rating agency;

provided in each case that (a) the opinion may only be disclosed in connection with the matters set forth herein, (b) the recipient accepts that it may not rely upon this opinion letter and as a consequence thereof, we do not assume any duty or liability to any person to who such disclosure is made, and (c) the recipient accepts to keep this opinion letter confidential. Except as otherwise permitted in connection with clauses (a) – (f) immediately above, none of the contents of this opinion letter may be made public without our prior written consent; provided, however, that reference to this opinion letter may be made in the Loan Agreement, the Opinion Documents and any list of closing documents relating thereto.

Very truly yours,

Andrés Sanfuentes

PHILIPPI PRIETOCARRIZOSA FERRERO DU & URÍA

5

Exhibit E-4

FORMS OF OPINION OF PERUVIAN COUNSEL TO THE LENDERS

(Attached)

July 31, 2019

CS PERU INFRASTRUCTURE HOLDINGS LLC, in its capacity as the Initial

Lender under the Loan Agreement (as defined below)

20 Dayton Avenue

Greenwich, CT 06830

Ladies and Gentlemen:

Rebaza, Alcázar & De Las Casas Abogados Financieros has acted as Peruvian counsel to CS PERU INFRASTRUCTURE HOLDINGS LLC, a limited liability company organized and existing under the laws of the State of Delaware (the Lender), with respect to the execution and delivery of, and the performance of the obligations under, the Transaction Documents (as defined below), by and among the Lender, in its capacity as Initial Lender, and (i) GRAÑA Y MONTERO S.A.A., in its capacity as borrower (the Borrower) and (ii) the other parties to the Transaction Documents, as the case may be.

This opinion is submitted to the Lender pursuant to Section 5.03(a) of the loan agreement (including the schedules and exhibits attached thereto, the Loan Agreement), dated as of July 31, 2019, by and between the Lender and the Borrower. All capitalized terms used herein and not otherwise defined shall have their respective meanings as set forth in the Loan Agreement.

We have examined executed versions of the following documents (collectively, but excluding the Organizational Documents (as defined below), the Transaction Documents):

(a) The Loan Agreement;

(b) The Peruvian Note, dated as of July 31, 2019 (the Peruvian Note, together with each other Peruvian Note provided by the Borrower pursuant to the terms of the Loan Agreement, the Peruvian Notes) and the related Acuerdo de Llenado, dated as of July 31, 2019;

(c) The Fee Letter;

(d) The Trust Agreement;

(e) The First Lien Chilean Share Pledge Agreement;

(f) The Second Lien Chilean Share Pledge Agreement (together with (e), the Chilean Share Pledge Agreements);

(g) The bylaws (the Organizational Documents) of (i) the Borrower, (ii) Graña y Montero Petrolera S.A. (GMP); (iii) GyM Ferrovias S.A. (GyM Ferrovias); and (iv) Norvial S.A. (Norvial and together with GyM Ferrovias, GMP and the Borrower, the Peruvian Entities);

(h) The form of an Irrevocable Instruction Letter, to be delivered by the Borrower and/or the Trustee to GyM Ferrovías in accordance with the terms of the Trust Agreement;

(i) The form of an Irrevocable Instruction Letter, to be delivered by the Borrower and/or the Trustee to Norvial in accordance with the terms of the Trust Agreement (together with (h), the Irrevocable Instruction Letters);

(j) The form of a Notification Letter, to be delivered by the Borrower and/or the Trustee to GMP in accordance with the terms of the Trust Agreement; and

(k) The form of a Notification Letter, to be delivered by the Borrower and/or the Trustee to Adexus S.A. (Adexus) in accordance with the terms of the Trust Agreement (together with (i), the Notification Letters).

In rendering the opinions expressed herein, we have assumed and not verified (i) the genuineness of all signatures contained in the documents provided to us; (ii) the authenticity of all documents submitted to us as originals and the conformity with original documents of all documents submitted to us as copies; (iii) the due authorization, execution and delivery of each of the Transaction Documents by each of the parties thereto (other than the Borrower) and that the performance thereof is within the capacity and powers of each of them (other than the Borrower); (iv) that all the signatories to the Transaction Documents have been duly authorized to execute and deliver such documents (other than the Borrower); (v) the accuracy as to factual matters of each document we have reviewed (including, without limitation, the accuracy of the representations and warranties of the Borrower in any of the aforementioned documents) and the certificates or other documents delivered in connection therewith or herewith; (vi) that there is nothing under any law (other than the laws of the Republic of Peru) which would or might affect the opinions hereinafter appearing; (vii) that all factual information provided to us by the Borrower is true, correct and complete; (viii) that the execution and delivery by the parties of the Transaction Documents to which each is a party, and the performance of such party’s obligations thereunder, does not require (other than under the laws of the Republic of Peru) any notice to, filing or registration by the relevant party, or the grant of any approval or consent to such party of, any governmental agency or authority (other than a governmental agency or authority of the Republic of Peru) that has not been made or obtained, subject to the qualifications described in Section 16 hereof; (ix) that the execution, delivery and performance by the Borrower of each Transaction Document do not violate or conflict with the law of any jurisdiction other than the law of Republic of Peru; and (x) that there is no

2

arrangement between the parties to each Transaction Document which modifies or supersedes any of the terms of the relevant Transaction Document. We have no reason to believe that such reliance was not justified.

On the basis of the foregoing and upon such investigations as we have deemed necessary for these purposes, but subject to certain assumptions and qualifications contained herein we are of the opinion that:

1. The Borrower is a “sociedad anónima abierta”, each of the other Peruvian Entities is a “sociedad anónima”, and each of the Peruvian Entities is validly existing, in good standing under the laws of the Republic of Peru, and has the corporate power to own or dispose of the assets and rights expressed to be charged as security by means of the Trust Agreement and the Chilean Share Pledge Agreements in favor of the Lender, conduct its business as presently conducted and, in the case of the Borrower, to enter into, and comply with all of its obligations under, each of the Transaction Documents. None of the Peruvian Entities is subject to any bankruptcy or insolvency proceeding, or to any liquidation process.

2. The Borrower has taken all necessary corporate actions to authorize its execution and delivery of, and the performance of its obligations under, each of the Transaction Documents.

3. Each Transaction Document (other than the Irrevocable Instruction Letters and the Notification Letters) has been executed and delivered by a duly authorized person of the Borrower and constitutes the Borrower’s legal, valid and binding obligation enforceable against the Borrower and effective in accordance with its terms, except as may be limited by (a) bankruptcy, insolvency, fraudulent transfer, reorganization, liquidations, moratorium or other similar laws relating to or affecting the rights and remedies of creditors generally, (b) application of Article 2049 of the Peruvian Civil Code under which provisions of foreign law shall be excluded if they are incompatible with international public policy or incompatible with good morals and/or (c) any applicable laws, orders and rulings from jurisdictions outside of the Republic of Peru, as to which we express no opinion. We have no reason to believe that any of the limitations of Article 2049 of the Peruvian Civil Code apply in the case of the applicable Transaction Documents.

4. Each of the Irrevocable Instruction Letters and each of the Notification Letters have been duly authorized by the Borrower and, when (a) the Notification Letters in respect of GMP and Adexus have been executed by duly authorized representatives of the Borrower and/or the Trustee and delivered by the relevant Peruvian public notary or the Borrower, as the case may be, and (b) the Irrevocable Instruction Letters in respect of GyM Ferrovias and Norvial have been executed by duly authorized representatives of the Borrower and/or the Trustee and delivered by the relevant Peruvian public notary, in each case, in the applicable form attached to the Trust Agreement, each of the

3

Irrevocable Instruction Letters and each of the Notification Letters, as applicable, will constitute legal, valid, binding and enforceable obligations of the Borrower in accordance with its terms, except for limitations that may arise from bankruptcy, reorganization, insolvency, fraudulent transfer, fraudulent conveyance, moratorium and similar laws of general applicability relating to or affecting creditors’ rights.

5. Subject to the qualifications set forth in Section 16, all Governmental Approvals that are required for: (a) the execution and delivery by the Borrower of each of the Transaction Documents, and (b) the validity, binding effect and enforceability of each of the Transaction Documents, have been obtained and are in full force and effect, except such as may be required under any jurisdiction outside of the Republic of Peru, as to which we express no opinion.

6. The Peruvian Note and its corresponding instruction letter (Acuerdo de Llenado) meet, and each other Peruvian Note and its corresponding instruction letter (Acuerdo de Llenado) provided by the Borrower pursuant to the terms of the Loan Agreement, when executed and delivered by authorized representatives of the Borrower, will meet the requirements to be considered valid and effective pagarés incompletos in accordance with Law No. 27287 (Ley de Títulos Valores) (as amended), and (i) constitutes a legal, valid and binding obligation of the Borrower and (ii) entitle the holder of such Peruvian Note to initiate a proceso único de ejecución before the competent Courts in the Republic of Peru against the Borrower, in accordance with the Peruvian Code of Civil Procedure (Código Procesal Civil), for the enforcement thereof; provided that, the Peruvian Note is completed in accordance with its respective instruction letter, as set forth by Article 10 of the Peruvian Securities Act Law No. 27287 (Ley de Títulos Valores).

7. The Trust Agreement is a legal, valid, binding and enforceable obligation of each of the parties thereto and creates a valid, first priority security interest in favor of the Lender and each of the other Lenders, constituting an estate separate from the estate of the Borrower in accordance with its terms, pursuant to which valid and enforceable first priority Liens have been created under Peruvian law over the assets and rights expressed to be charged as security thereby in favor of the Lender and the other Lenders, subject to the verification of the Condicion Suspensiva Venta Adexus and the Condicion Suspensiva Dividendos Adexus (as defined in Trust Agreement). In order for the Trust Agreement to be considered enforceable against: (i) Adexus, GMP, Norvial and GyM Ferrovias, each of such companies shall be notified through the Irrevocable Instruction Letters or the Notification Letters, as the case may be, and (ii) third parties (i.e. erga omnes), the Trust Agreement shall be recorded in the Peruvian Public Registries (Registro Mobiliario de Contratos), and no further action is required for the enforceability against third parties of the Trust Agreement.

8. The authorization, execution, validity and enforceability of each

4

Transaction Document and any other agreements, documents, filings, recordings or instruments necessary for the implementation of any of Transaction Document does not (x) contravene or violate, conflict with, or constitute or result in a breach of or default under (or an event that with notice or the passage of time or both would constitute a default or an event of default under): (a) any applicable law, regulation or ruling of any competent authority in the Republic of Peru (subject to Section 16), (b) the Organizational Documents and/or charter documents of the Peruvian Entities, (c) any Governmental Approval granted to the Borrower, (d) any material agreement or instrument binding on or affecting the Borrower, or any of its assets and rights expressed to be charged as security by means of the Trust Agreement and the Chilean Share Pledge Agreements, known to us, or (e) any order, judgment, decree or award known to us; or (y) result in or require the creation or imposition of any lien, charge or encumbrance upon or with respect to any of the properties or assets of the Borrower, known to us (except for the security trust created pursuant to the Trust Agreement). The Transaction Documents contain no provision which is contrary to Peruvian public policy, or Peruvian national sovereignty, or for which would not be upheld in the courts of the Republic of Peru, subject to the conditions set forth in Section 10 of this opinion.

9. The choice of the law of the State of New York, United States of America, under the applicable Transaction Documents would be upheld as a valid choice of law, and will be recognized by the courts of the Republic of Peru, except for the limitations of (i) Article 2049 of the Peruvian Civil Code, under which provisions of foreign law shall be excluded if they are incompatible with international public policy (orden público) or good morals; (ii) Article 2088 of the Peruvian Civil Code, by virtue of which the creation, content and extinction of in rem rights on tangible assets located in Peru is governed by Peruvian law and (iii) Article 2.1 of the Peruvian Insolvency System General Act (Ley No. 27809), according to which any insolvency, bankruptcy, moratorium, fraudulent conveyance or transfer involving entities domiciled in the Republic of Peru shall be governed by Peruvian law. In any such scenario, the law of the Republic of Peru will apply.

10. A final, non-appealable judgment obtained from the United States District Court of the Southern District of New York or any United States Federal court or state court sitting in the State of New York will be recognizable and enforceable in the competent courts of the Republic of Peru without re-examination, review of the merits of the cause of action in respect of which such judgment was given, or relitigation of the merits adjudicated upon, provided that the following conditions are met:

10.1. such judgment does not resolve matters under the exclusive jurisdiction of Peruvian courts;

10.2. the court rendering such judgment had jurisdiction under its own private international conflicts of law rules and under general principles of international procedural jurisdiction;

5

10.3. the defendant was served with process in accordance with the laws of the place where such court sits, was granted a reasonable opportunity to appear before such foreign courts and was guaranteed due process rights;

10.4. the judgment has the status of res judicata in the jurisdiction of the court rendering such judgment;

10.5. there is no pending litigation in the Republic of Peru between the same parties for the same dispute, which shall have been initiated before the commencement of the proceeding that concluded with the foreign judgment;

10.6. such judgment is not incompatible with another enforceable judgment in the Republic of Peru unless such foreign judgment was rendered first;

10.7. such judgment is not contrary to the public policy (orden público) of the Republic of Peru or good morals ;

10.8. it is not proven that the court rendering such judgment denies enforcement of Peruvian judgments, or engages in a review of the merits thereof;

10.9. such final judgment has been (i) duly apostilled by the competent authority of the jurisdiction of the issuing court, in case of jurisdictions that are parties to the Hague Apostille Convention, or (ii) certified by Peruvian consular authorities, in case of jurisdictions that are not part of the Hague Apostille Convention, and is accompanied by a certified, sworn translation of such judgment in Spanish, by a Peruvian public translator;

10.10. the applicable court taxes or filing fees have been paid; and

10.11. if there is in effect a treaty between the country where said foreign court sits and the Republic of Peru, regarding the recognition and enforcement of foreign judgments, the provisions of such treaty shall apply. In the absence of such a treaty, the reciprocity rule is applicable (such reciprocity rule being presumed), under which a judgment given by a foreign competent court will be admissible in the Peruvian courts and will be enforceable thereby, except if according to such foreign law: (i) judgments issued by Peruvian courts are not admissible in such foreign country or (ii) judgments issued by Peruvian courts are subject to re-examination by such competent court, of the issues dealt with therein.

Assuming that the foreign final judgment complies with the standards set forth above in Section 10, and in the absence of any condition referred to above in Section 10 which would render a foreign judgment unenforceable, the respective parties, would be entitled to enforce

6

such judgment in the Republic of Peru by proceedings for the enforcement of a foreign final judgment under the laws of the Republic of Peru.

11. Neither the Borrower nor any of its assets are immune on the grounds of sovereignty or otherwise from jurisdiction, attachment (before or after judgment) or execution in respect of any action or proceeding related in any way to the Transaction Documents that may be brought in the courts of the Republic of Peru.

12. No registration taxes, stamp duties or similar taxes are payable to any governmental authority in the Republic of Peru in connection with the execution and delivery of the Transaction Documents, and/or the performance, admissibility in evidence or enforcement of the Transaction Documents, except for court taxes or filing fees for enforcement in the Republic of Peru as referenced in Section 10 hereof.

13. It is not necessary for the Lender or any other Lender to hold any license for carrying out banking business or obtain any other license or authorization in the Republic of Peru in order to enter into the Transaction Documents or exercise or enforce its or their rights therein. Neither the Lender nor any other Lender will be deemed to be resident, or to carry on business, in the Republic of Peru as a result of entering into or enforcing the Transaction Documents.

14. The Borrower is subject to civil and commercial law with respect to its obligations under the Transaction Documents to which it is a party. The execution and delivery of the Transaction Documents as well as the performance by the Borrower of its obligations thereunder constitute private and commercial acts rather than public or governmental acts.

15. The obligations of the Borrower with respect to the Lender and each other Lender under each Transaction Document will rank at all times at least pari passu in priority of payment with respect to all existing and future unsecured indebtedness of the Borrower, except for indebtedness and other obligations of the Borrower held by those whose claims are preferred upon the occurrence of any bankruptcy, insolvency or liquidation to the extent required by the terms of Law No. 27809 (Ley General del Sistema Concursal), as amended.

16. Other than the provisions applicable to the Borrower — limiting its ability to transfer funds abroad — under Law N° 30737 and its regulations, there are no Peruvian foreign exchange controls, Governmental Approvals or similar consents required for the execution and delivery by the Borrower of, and performance by the Borrower of its obligations under, the Transaction Documents (including, without limitation, the payment of all monies to the Lender and each other Lender in accordance with the Transaction Documents).

The limitations arising from Law N° 30737 and its regulations should

7

not apply to the Transaction Documents as the Borrower will not be making any transfer of funds abroad, given that payment of the Obligations under the Loan Agreement will be made to a bank account opened by the Initial Lender at a Peruvian bank. This opinion is made based on our experience and legal analysis of the prohibitions set forth in the abovementioned law and regulations; nevertheless, there are no binding precedents as of the date hereof under which competent judges have issued rulings with respect to these types of limitations vis a vis payment of monies to foreign lenders under loan transactions that are subject to foreign law.

This opinion speaks only as of the date hereof. We expressly disclaim any responsibility to advise you of any development or circumstance of any kind including any change of law or interpretation thereof or fact that may occur after the date of this opinion even though such development, circumstance or change may affect the legal analysis, a legal conclusion or any other matter set forth in or relating to this opinion.

The opinions set forth herein are, however, subject to certain qualifications, namely:

(A) The opinions expressed in this opinion are limited to questions arising under the laws of the Republic of Peru as currently in effect, and we do not purport to express an opinion on any question arising under the laws of any other jurisdiction.

(B) We are attorneys admitted to practice in the Republic of Peru and we express no opinions as to any laws other than the laws of such jurisdiction. In particular, we have made no independent investigation of the laws of any other jurisdiction as a basis for our opinion, and have assumed that there is nothing in any such law that affects our opinions.

(C) The term “enforceable” means that the obligations assumed by the Borrower under the Transaction Documents are of a type that the courts of the Republic of Peru typically enforce, except as may be limited by bankruptcy, insolvency, fraudulent conveyance or transfer, liquidation, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors generally.

(D) The admissibility in evidence and enforceability before a Peruvian court of any documents executed in a language other than Spanish requires such documents to be (i) officially translated to Spanish by a duly authorized public translator in Peru; (ii) if issued in any country other than in the Republic of Peru (x) which is not a signatory country of The Hague Apostille Convention, legalized before a notary public, the Ministry of Foreign Affairs of such country, the competent Peruvian consulate and before the Peruvian Ministry of Foreign Affairs (Ministerio de Relaciones Exteriores del Perú), or (y) which is a signatory country of The Hague Apostille Convention, must be certified with an apostille, and (iii) applicable court fees are paid.

8

(E) We are furnishing this opinion to you and any person that becomes a Lender under the Loan Agreement in accordance with the provisions of Section 2.08(b) or 10.04(b) thereof solely for your and their benefit and this opinion may not be used, circulated, quoted or otherwise referred to, or relied upon by, any person or entity without our prior written consent other than:

i. any person to whom disclosure is required to be made by applicable law or order of any court or governmental agency or is required or requested to be made pursuant to the rules or regulations of any supervisory or regulatory authority or in connection with any judicial proceedings;

ii. the officers, employees, rating agencies, auditors, accountants, counsel and others professional advisers of the Lender and each other Lender;

iii. in connection with any legal action to which the Lender or any other Lender or any of their respective Related Parties is a party arising out of the transactions contemplated by the Transaction Documents; and

iv. any person who is a potential or actual transferee, participant or assignee of the Lender or any other Lender (in the same capacity), and their respective professional advisers;

on the basis that (1) such disclosure is made solely to enable any such person to be informed that an opinion has been given and to be made aware of its terms but not for the purposes of reliance, and (2) we do not assume any duty or liability to any person to whom such disclosure is made and in preparing this opinion we only had regard to the interests of our client(s).

(F) We express no opinion as to any agreement, instrument or other document other than as specified in this opinion.

Very truly yours,

Alberto Rebaza

Rebaza, Alcázar & De Las Casas

9

July 31, 2019

CS PERU INFRASTRUCTURE HOLDINGS LLC, in its capacity as the Initial

Lender under the Opinion Document (as defined below)

20 Dayton Avenue

Greenwich, CT 06830

Ladies and Gentlemen:

Rebaza, Alcázar & De Las Casas Abogados Financieros has acted as Peruvian counsel to CS PERU INFRASTRUCTURE HOLDINGS LLC, a limited liability company organized and existing under the laws of the State of Delaware (the Initial Lender), with respect to the execution and delivery of, and the performance of the obligations under, the Indemnification Agreement (the Opinion Document), dated as of July 31, 2019, by GRAÑA Y MONTERO S.A.A., in its capacity as borrower (the Borrower) to the benefit of the Initial Lender, in its capacity as Initial Lender, and the other parties to the Opinion Document, as the case may be.

All capitalized terms used herein and not otherwise defined shall have their respective meanings as set forth in the Opinion Document.

In rendering the opinions expressed herein, we have assumed and not verified (i) the genuineness of all signatures contained in the documents provided to us; (ii) the authenticity of all documents submitted to us as originals and the conformity with original documents of all documents submitted to us as copies; (iii) the due authorization, execution and delivery of the Opinion Document by each of the parties thereto (other than the Borrower) and that the performance thereof is within the capacity and powers of each of them (other than the Borrower); (iv) that all the signatories to the Opinion Document have been duly authorized to execute and deliver the Opinion Document (other than the Borrower); (v) the accuracy as to factual matters of the Opinion Document (including, without limitation, the accuracy of the representations and warranties of the Borrower therein) and the certificates or other documents delivered in connection therewith or herewith; (vi) that there is nothing under any law (other than the laws of the Republic of Peru) which would or might affect the opinions hereinafter appearing; (vii) that all factual information provided to us by the Borrower is true, correct and complete; (viii) that the execution and delivery by the parties of the Opinion Document, and the performance of such party’s obligations thereunder, does not require (other than under the laws of the Republic of Peru) any notice to, filing or registration by the relevant party, or the grant of any approval or consent to such party of, any governmental agency or authority (other than a governmental agency or authority of the Republic of Peru) that has not been made or obtained, subject to the qualifications described in Section 13 hereof; (ix) that the execution, delivery and performance by the Borrower of the Opinion Document does not violate or conflict with the law of any

jurisdiction other than the law of Republic of Peru; and (x) that there is no arrangement between the parties to the Opinion Document which modifies or supersedes any of the terms of the Opinion Document. We have no reason to believe that such reliance was not justified.

On the basis of the foregoing and upon such investigations as we have deemed necessary for these purposes, but subject to certain assumptions and qualifications contained herein we are of the opinion that:

1. The Borrower is a “sociedad anónima abierta”, validly existing, in good standing under the laws of the Republic of Peru, and has the corporate power to conduct its business as presently conducted and, to enter into, and comply with all of its obligations under, the Opinion Document. The Borrower is not subject to any bankruptcy or insolvency proceeding, or to any liquidation process.

2. The Borrower has taken all necessary corporate actions to authorize its execution and delivery of, and the performance of its obligations under, the Opinion Document.

3. The Opinion Document has been executed and delivered by a duly authorized person of the Borrower and constitutes the Borrower’s legal, valid and binding obligation enforceable against the Borrower and effective in accordance with its terms, except as may be limited by (a) bankruptcy, insolvency, fraudulent transfer, reorganization, liquidations, moratorium or other similar laws relating to or affecting the rights and remedies of creditors generally, (b) application of Article 2049 of the Peruvian Civil Code under which provisions of foreign law shall be excluded if they are incompatible with international public policy or incompatible with good morals and/or (c) any applicable laws, orders and rulings from jurisdictions outside of the Republic of Peru, as to which we express no opinion. We have no reason to believe that any of the limitations of Article 2049 of the Peruvian Civil Code apply in the case of the Opinion Document.

4. Subject to the qualifications set forth in Section 13, all Governmental Approvals that are required for: (a) the execution and delivery by the Borrower of the Opinion Document, and (b) the validity, binding effect and enforceability of the Opinion Document, have been obtained and are in full force and effect, except such as may be required under any jurisdiction outside of the Republic of Peru, as to which we express no opinion.

5. The authorization, execution, validity and enforceability of the Opinion Document and any other agreements, documents, filings, recordings or instruments necessary for the implementation of the Opinion Document does not (x) contravene or violate, conflict with, or constitute or result in a breach of or default under (or an event that with notice or the passage of time or both would constitute a default or an event of default under): (a) any applicable law, regulation or ruling of any competent authority in the Republic of Peru (subject to Section 13), (b) the Organizational Documents and/or charter documents of

2

the Borrower, (c) any Governmental Approval granted to the Borrower, (d) any material agreement or instrument binding on or affecting the Borrower, known to us, or (e) any order, judgment, decree or award known to us; or (y) result in or require the creation or imposition of any lien, charge or encumbrance upon or with respect to any of the properties or assets of the Borrower, known to us. The Opinion Document contains no provision which is contrary to Peruvian public policy, or Peruvian national sovereignty, or for which would not be upheld in the courts of the Republic of Peru, subject to the conditions set forth in Section 7 of this opinion.

6. The choice of the law of the State of New York, United States of America, under the Opinion Document would be upheld as a valid choice of law, and will be recognized by the courts of the Republic of Peru, except for the limitations of (i) Article 2049 of the Peruvian Civil Code, under which provisions of foreign law shall be excluded if they are incompatible with international public policy (orden público) or good morals; (ii) Article 2088 of the Peruvian Civil Code, by virtue of which the creation, content and extinction of in rem rights on tangible assets located in Peru is governed by Peruvian law and (iii) Article 2.1 of the Peruvian Insolvency System General Act (Ley No. 27809), according to which any insolvency, bankruptcy, moratorium, fraudulent conveyance or transfer involving entities domiciled in the Republic of Peru shall be governed by Peruvian law. In any such scenario, the law of the Republic of Peru will apply.

7. A final, non-appealable judgment obtained from the United States District Court of the Southern District of New York or any United States Federal court or state court sitting in the State of New York will be recognizable and enforceable in the competent courts of the Republic of Peru without re-examination, review of the merits of the cause of action in respect of which such judgment was given, or relitigation of the merits adjudicated upon, provided that the following conditions are met:

7.1. such judgment does not resolve matters under the exclusive jurisdiction of Peruvian courts;

7.2. the court rendering such judgment had jurisdiction under its own private international conflicts of law rules and under general principles of international procedural jurisdiction;

7.3. the defendant was served with process in accordance with the laws of the place where such court sits, was granted a reasonable opportunity to appear before such foreign courts and was guaranteed due process rights;

7.4. the judgment has the status of res judicata in the jurisdiction of the court rendering such judgment;

7.5. there is no pending litigation in the Republic of Peru between the same parties for the same dispute, which shall have been

3

initiated before the commencement of the proceeding that concluded with the foreign judgment;

7.6. such judgment is not incompatible with another enforceable judgment in the Republic of Peru unless such foreign judgment was rendered first;

7.7. such judgment is not contrary to the public policy (orden público) of the Republic of Peru or good morals;

7.8. it is not proven that the court rendering such judgment denies enforcement of Peruvian judgments, or engages in a review of the merits thereof;

7.9. such final judgment has been (i) duly apostilled by the competent authority of the jurisdiction of the issuing court, in case of jurisdictions that are parties to the Hague Apostille Convention, or (ii) certified by Peruvian consular authorities, in case of jurisdictions that are not part of the Hague Apostille Convention, and is accompanied by a certified, sworn translation of such judgment in Spanish, by a Peruvian public translator;

7.10. the applicable court taxes or filing fees have been paid; and

7.11. if there is in effect a treaty between the country where said foreign court sits and the Republic of Peru, regarding the recognition and enforcement of foreign judgments, the provisions of such treaty shall apply. In the absence of such a treaty, the reciprocity rule is applicable (such reciprocity rule being presumed), under which a judgment given by a foreign competent court will be admissible in the Peruvian courts and will be enforceable thereby, except if according to such foreign law: (i) judgments issued by Peruvian courts are not admissible in such foreign country or (ii) judgments issued by Peruvian courts are subject to re-examination by such competent court, of the issues dealt with therein.

Assuming that the foreign final judgment complies with the standards set forth above in Section 7, and in the absence of any condition referred to above in Section 7 which would render a foreign judgment unenforceable, the respective parties, would be entitled to enforce such judgment in the Republic of Peru by proceedings for the enforcement of a foreign final judgment under the laws of the Republic of Peru.

8. Neither the Borrower nor any of its assets are immune on the grounds of sovereignty or otherwise from jurisdiction, attachment (before or after judgment) or execution in respect of any action or proceeding related in any way to the Opinion Document that may be brought in the courts of the Republic of Peru.

9. No registration taxes, stamp duties or similar taxes are payable to any

4

governmental authority in the Republic of Peru in connection with the execution and delivery of the Opinion Document, and/or the performance, admissibility in evidence or enforcement of the Opinion Document, except for court taxes or filing fees for enforcement in the Republic of Peru as referenced in Section 7 hereof.

10. It is not necessary for the Initial Lender or any other Lender to hold any license for carrying out banking business or obtain any other license or authorization in the Republic of Peru in order to enter into the Opinion Document or exercise or enforce its or their rights therein. Neither the Initial Lender nor any other Lender will be deemed to be resident, or to carry on business, in the Republic of Peru as a result of entering into or enforcing the Opinion Document.

11. The Borrower is subject to civil and commercial law with respect to its obligations under the Opinion Document to which it is a party. The execution and delivery of the Opinion Document as well as the performance by the Borrower of its obligations thereunder constitute private and commercial acts rather than public or governmental acts.

12. The obligations of the Borrower with respect to the Initial Lender and each other Lender under the Opinion Document will rank at all times at least pari passu in priority of payment with respect to all existing and future unsecured indebtedness of the Borrower, except for indebtedness and other obligations of the Borrower held by those whose claims are preferred upon the occurrence of any bankruptcy, insolvency or liquidation to the extent required by the terms of Law No. 27809 (Ley General del Sistema Concursal), as amended.

13. Other than the provisions applicable to the Borrower — limiting its ability to transfer funds abroad — under Law N° 30737 and its regulations, there are no Peruvian foreign exchange controls, Governmental Approvals or similar consents required for the execution and delivery by the Borrower of, and performance by the Borrower of its obligations under, the Opinion Document (including, without limitation, the payment of all monies to the Initial Lender and each other Lender in accordance with the Opinion Document).

The limitations arising from Law N° 30737 and its regulations should not apply to the Opinion Document as the Borrower will not be making any transfer of funds abroad, given that the payments to be made by the Borrower to the Initial Lender under the Opinion Document will be made to a bank account opened by the Initial Lender at a Peruvian bank. This opinion is made based on our experience and legal analysis of the prohibitions set forth in the abovementioned law and regulations; nevertheless, there are no binding precedents as of the date hereof under which competent judges have issued rulings with respect to these types of limitations vis a vis payment of monies to foreign lenders under loan transactions that are subject to foreign law.

This opinion speaks only as of the date hereof. We expressly disclaim any responsibility to advise you of any development or circumstance of any

5

kind including any change of law or interpretation thereof or fact that may occur after the date of this opinion even though such development, circumstance or change may affect the legal analysis, a legal conclusion or any other matter set forth in or relating to this opinion.

The opinions set forth herein are, however, subject to certain qualifications, namely:

(A) The opinions expressed in this opinion are limited to questions arising under the laws of the Republic of Peru as currently in effect, and we do not purport to express an opinion on any question arising under the laws of any other jurisdiction.

(B) We are attorneys admitted to practice in the Republic of Peru and we express no opinions as to any laws other than the laws of such jurisdiction. In particular, we have made no independent investigation of the laws of any other jurisdiction as a basis for our opinion, and have assumed that there is nothing in any such law that affects our opinions.

(C) The term “enforceable” means that the obligations assumed by the Borrower under the Opinion Document are of a type that the courts of the Republic of Peru typically enforce, except as may be limited by bankruptcy, insolvency, fraudulent conveyance or transfer, liquidation, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors generally.

(D) The admissibility in evidence and enforceability before a Peruvian court of any documents executed in a language other than Spanish requires such documents to be (i) officially translated to Spanish by a duly authorized public translator in Peru; (ii) if issued in any country other than in the Republic of Peru (x) which is not a signatory country of The Hague Apostille Convention, legalized before a notary public, the Ministry of Foreign Affairs of such country, the competent Peruvian consulate and before the Peruvian Ministry of Foreign Affairs (Ministerio de Relaciones Exteriores del Perú), or (y) which is a signatory country of The Hague Apostille Convention, must be certified with an apostille, and (iii) applicable court fees are paid.

(E) We are furnishing this opinion to you and any person that becomes a Lender under the Loan Agreement in accordance with the provisions of Section 2.08(b) or 10.04(b) thereof solely for your and their benefit and this opinion may not be used, circulated, quoted or otherwise referred to, or relied upon by, any person or entity without our prior written consent other than:

i. any person to whom disclosure is required to be made by applicable law or order of any court or governmental agency or is required or requested to be made pursuant to the rules or regulations of any supervisory or regulatory authority or in connection with any judicial proceedings;

6

ii. the officers, employees, rating agencies, auditors, accountants, counsel and others professional advisers of the Initial Lender and each other Lender;

iii. in connection with any legal action to which the Initial Lender or any other Lender or any of their respective Related Parties is a party arising out of the transactions contemplated by the Credit Documents; and

iv. any person who is a potential or actual transferee, participant or assignee of the Initial Lender or any other Lender (in the same capacity), and their respective professional advisers;

on the basis that (1) such disclosure is made solely to enable any such person to be informed that an opinion has been given and to be made aware of its terms but not for the purposes of reliance, and (2) we do not assume any duty or liability to any person to whom such disclosure is made and in preparing this opinion we only had regard to the interests of our client(s).

(F) We express no opinion as to any agreement, instrument or other document other than as specified in this opinion.

Very truly yours,

Alberto Rebaza

Rebaza, Alcázar & De Las Casas

7

Exhibit E-5

FORM OF OPINION OF CHILEAN COUNSEL TO THE LENDERS

(Attached)

July 31, 2019

To

CS Peru Infrastructure Holdings LLC

as Initial Lender under (and as defined in) the Loan Agreement

Re:        Gramercy – Loan Agreement - Chile

Ladies and Gentlemen:

We have acted as special Chilean counsel to CS Peru Infrastructure Holdings LLC (the “Initial Lender”), a limited liability company, organized and existing under the laws of the State of Delaware, United States of America, in connection with the transactions contemplated by (a) the Loan Agreement, dated as of July 31, 2019 (the “Loan Agreement”), by and between Graña y Montero S.A.A., a sociedad anónima abierta, organized and existing under the laws of the Republic of Peru (the “Borrower” or the “Shareholder”), and the Initial Lender; (b) any notes (for the avoidance of doubt, in the case of the Peruvian Notes, together with their corresponding instructions letters) issued to any Lender evidencing each Loan and all other Obligations; (c) the fee letter, dated as of July 31, 2019, among the Borrower and Gramercy Funds Management, LLC; (d) that certain trust agreement (Contrato de Fideicomiso), dated as of July 31, 2019, by and between the Borrower and La Fiduciaria S.A., as the Trustee; (e) the first lien pledge agreement over shares (Contrato de Prenda sin Desplazamiento sobre Acciones) governed by Chilean law, granted by public deed, dated as of July 31, 2019, before the Santiago Notary Office of Mr. Patricio Raby Benavente, of 88.66% of the Borrower’s existing Equity Interests (including economic ownership interests and voting rights) and of 100% of the Borrower’s future Equity Interests (including economic ownership interests and voting rights), in each case, in Adexus S.A., a sociedad anónima cerrada¸ organized and existing under the laws of the Republic of Chile (“Adexus”) (the “First Lien Chilean Share Pledge Agreement”); (e) the second lien pledge agreement over shares (Contrato de Prenda sin Desplazamiento sobre Acciones) governed by Chilean law, granted by public deed, dated as of July 31, 2019, before the Santiago Notary Office of Mr. Patricio Raby Benavente, of 11.34%) of the Borrower’s existing Equity Interests (including economic ownership interests and voting rights) in Adexus (the “Second Lien Chilean Share Pledge Agreement” and together with the First Lien Chilean Share Pledge Agreement, the “Opinion Documents”); (f) the Irrevocable Instruction Letter from the Borrower, which is to be delivered by the relevant Peruvian public notary to GyM Ferrovías; (g) the Irrevocable Instruction Letter from the Borrower, which is to be delivered by the relevant Peruvian public notary to Norvial; (h) the Notification Letter from the Borrower, which is to be delivered by the relevant Peruvian public notary to GMP; and (i) the Notification Letter from the Borrower, which is to be delivered by the Borrower to Adexus.

This legal opinion is being provided pursuant to Section 5.03(a) of the Loan Agreement. The opinions expressed herein are limited to questions arising under the laws of

1

the Republic of Chile (“Chilean Law” and “Chile”, respectively). Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Loan Agreement.

In connection with the opinions expressed herein, we have examined originals or copies certified or otherwise identified to our satisfaction of the following documents:

(a) the Loan Agreement;

(b) the power of attorney of the Borrower, which authorizes the persons indicated thereby to execute and deliver, and perform under, the First Lien Chilean Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement;

(c) the Shareholders’ Registry of Adexus;

(d) the constituting organizational deeds (estatutos) and By-Laws of Adexus listed on Schedule 1 hereto (the “Organizational Documents”); and

(e) the shareholders’ and Board of Directors’ resolutions of Adexus, listed on Schedule 2 hereto.

We have reviewed and, as to questions of fact, relied to the extent we have deemed appropriate, upon such other documents, instruments and certificates of public officials and officers and representatives of the Borrower, the Initial Lender and Adexus, except to the extent that representations in such documents cover matters of law as to which we expressly opine herein, and we have made such investigations of law, as we have deemed necessary or appropriate as a basis for the opinions expressed below.

In rendering the opinions expressed below, we have assumed without verification: (i) the authenticity of all documents and records submitted to us as originals and the conformity to the originals of all documents and records submitted to us as copies; (ii) the authenticity and genuineness of all signatures on the documents reviewed by us in connection therewith; (iii) the legal capacity of all natural Persons; (iv) the due organization and existence of each of the parties to the Opinion Documents (except for Adexus); (v) the due authorization, execution and delivery of the Opinion Documents by the parties thereto (except for Adexus) and that each such party (except for Adexus) had adequate power, authority and legal right to enter into the Opinion Documents to which it is, or will be, a party; and (vi) that the Opinion Documents which are governed by a law other than Chilean Law are valid, binding and enforceable under such other law and that there is nothing in any such laws that affects our opinions.

Based on the foregoing, and subject to the assumptions and qualifications set forth herein, it is our opinion that:

2

1.    Adexus has been duly established and validly exists as a sociedad anónima cerrada under the laws of Chile and has all requisite corporate power and authority to conduct its business in Chile.

2.    Adexus have all the requisite corporate power and authority to execute, deliver and perform its obligations under the Opinion Documents and to consummate the transactions contemplated thereby.

3.    As of the date hereof, the authorized capital stock of Adexus consists of 334,500 shares (the “Shares”), of which (i) 334,499 shares have been subscribed by the Borrower and (ii) one share has been subscribed by Concar S.A. Each Share is entitled to one vote with respect to the appointment of each Person proposed to serve on the board of directors of Adexus and all other matters requiring shareholders’ vote under Chilean Law. Except for (i) the Liens created pursuant to the First Lien Chilean Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement in favor of the Lenders and (ii) the Adexus Financing Lien, no Person has any Shares, any rights to receive distributions of Adexus’ assets, any rights, benefits or privileges pertaining to any of the foregoing (including, without limitation, voting rights and the right to participate in the management of Adexus) or any other equity interest in Adexus as disclosed and registered in the Shareholders Registry of Adexus.

4.    The First Lien Chilean Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement, in each case, to which the Initial Lender, the Shareholder and Adexus are a party, after complying with all necessary formalities listed on Schedule 3 hereto, will create a legal, valid and fully perfected security interest and Lien upon the Shares owned by the Shareholder in favor of the Lenders as security for the obligations purported to be secured thereby, subject to no other Liens, except for Liens created in favor of the Lenders pursuant to the Security Documents and the Adexus Financing Lien, and subject to no prior Liens except with respect to claims in Chile which are entitled to statutory priorities under Chilean Law, which are: (1) judicial costs incurred for the general benefit of creditors, (2) other bankruptcy expenses, (3) remunerations of workers and family allowances, (4) social security contributions, (5) tax withholdings and surcharges, (6) up to eleven months of severance payments per each worker, and (7) other preferences which are of similar nature and are entitled to statutory priorities under Chilean Law), in each case enforceable as such in Chile against the grantor thereof and against any trustee in bankruptcy (liquidador), any attaching creditor and all other third parties, in accordance with its terms. Except as specifically noted below, no filing, recording, authorization, registration, notarization, qualification or other action of or with any Chilean Governmental Authority is required, and no fee, duty or tax is required to be paid (other than in connection with the aforementioned actions), for the creation, maintenance, preservation and continued perfection of such security interests and Liens.

3

5.    The execution and delivery by the Shareholder and Adexus of the First Lien Chilean Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement and the performance by each of them of their respective obligations pursuant to such pledges and the consummation of the transactions contemplated thereby do not and will not conflict with or contravene the Organizational Documents of Adexus.

6.    With respect to the creation of Liens by the First Lien Chilean Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement, respectively, and certain other matters governed by the Loan Agreement please note that:

(i)    Schedule 3 hereto identifies each registration or other formality that is required to be taken to create, perfect or maintain the security interest and Lien contemplated to be created pursuant to the First Lien Chilean Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement and specifically notes which of the foregoing have been obtained or accomplished, and which are required in connection with pledges over future shares contemplated by the First Lien Chilean Share Pledge Agreement.

(ii)    We note that article 14 of Law No. 20,190 (“Law on Pledges Without Conveyance”) expressly authorizes pledges over corporeal or incorporeal assets, whether present or future. It further states that the pledge agreement over future assets is valid, but, regardless of the registration of such pledge in the pledge without conveyance registry, the pledgee will acquire the right in rem once the pledged asset exists, which right will be considered acquired from the date of registration of the pledge over future assets in the pledge without conveyance registry. Notwithstanding the foregoing, there are certain provisions in the Law on Pledges Without Conveyance and its regulations that require a certain level of detail or specification of the assets being pledged in order to proceed with its registration in the pledge without conveyance registry. Those provisions do not contain a carve out or exception for pledges over future shares, and therefore someone could interpret those provisions as implying that pledges over future shares could only encompass assets already in existence but not owned by the pledgor, and thus the pledge should specify in detail at the time of execution the specific details of those shares, in order to constitute a valid and legally binding obligation of the Shareholder. Notwithstanding the foregoing, we should note that, other than for the sufficient detail or specification of the future shares to be pledged thereunder, the pledge over future shares in the First Lien Chilean Share Pledge Agreement (hereinafter, the “Pledges over Future Shares”) complies with all requirements to constitute a valid and legally binding obligation of the Shareholder, as applicable, enforceable against the Shareholder in accordance with its terms, and, provided sufficient detail or specification of the future shares to be pledged thereunder is included in respect thereof by means of the declaration deed that the Shareholder as as pledgor is required to execute (pursuant to the provisions of the Pledges over Future Shares) within a certain period of time as stated therein, in order to identify in detail the corresponding shares acquired and subject to the pledge, each Pledge over Future Shares will constitute a valid and legally binding obligation of the Shareholder, enforceable against it in accordance with its terms upon its registration in the pledge without conveyance registry.

4

(iii)    Foreclosure on the collateral in which a security interest has been granted pursuant to the First Lien Chilean Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement, in each case, must be carried out through the court system in Chile upon presenting a título ejecutivo against the defendant.

(iv)    The execution and delivery of the First Lien Chilean Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement, respectively, is effective to grant to the Lenders a security interest in all right, title and interest of the Shareholder in and to the Shares that it owns in Adexus and its future ownership interests in Adexus (including all rights of the Shareholder to receive payments thereunder and distributions in respect thereof according to the terms thereof).

(v)    According to the certificate issued by the Servicio de Registro Civil e Identificación (Civil Registry and Identification Service) on July 30, 2019, there are no pledges registered in the Registro de Prendas sin Desplazamiento (Pledges Without Conveyance Registry) kept by such Service against assets of the Borrower, other than those granted in favor, and for the benefit, of the Lenders and the Adexus Financing Lien.

7.    The Borrower is subject to civil and commercial law with respect to its obligations under the Opinion Documents to which it is a party and the execution, delivery and performance by the Borrower of the Opinion Documents to which it is a party constitute private and commercial acts rather than public or governmental acts. Neither the Borrower nor any of its properties, revenues or assets has any immunity from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise).

8.    Insofar as Chilean Law is concerned, in accordance with the Shareholders Registry of Adexus, the Shareholder holds legal and valid title to the Shares owned by it and pledged pursuant to the First Lien Chilean Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement, respectively.

9.    None of the Lenders require, under Chilean Law, any kind of certificate of authority to transact business or otherwise qualify to do business in Chile, solely as a result of their making of loans or their extending of credit under the Loan Agreement or performing their respective obligations under the Opinion Documents, and neither shall any such Lenders, solely by reason of their making of loans and extending other credit under the Loan Agreement or performing their respective obligations under the Opinion Documents, be required (a) to qualify to do business in Chile or to comply with the requirements of any foreign registration or qualification statute of Chile, (b) to be subject to taxation by Chile or any political subdivision of Chile, except for applicable withholding taxes on interest, fees and other payments, or (c) to make any filing with any Chilean Governmental Authority in order to carry out any of the transactions contemplated by the Credit Documents or to avail itself of any of the remedies provided by the Credit Documents.

5

The foregoing opinions are subject to the following qualifications:

(a) we are attorneys admitted to practice in Chile and we express no opinions as to any laws other than the laws of Chile. In particular, we have made no independent investigation of the laws of the State of New York, the federal laws of the United States of America or the laws of the Republic of Peru as a basis for our opinion letter, and have assumed that there is nothing in any such laws that affects our opinion letter;

(b) the opinions expressed in this opinion letter speak only as of the date hereof. We expressly disclaim any responsibility to advise you of any development or circumstance of any kind including any change of law or fact that may occur after the date of this opinion letter even though such development, circumstance or change may affect the legal analysis, a legal conclusion or any other matter set forth in or relating to this opinion letter. Accordingly, any person relying on this opinion letter at any time after the date hereof should seek advice of its counsel as to the proper application of the opinions expressed in this opinion letter at such time; and

(c) this opinion letter is addressed to you and each other Lender in connection with the above-described transaction. This opinion letter may not be used, circulated, quoted or relied upon by you or any other Lender for any other purpose or relied upon by any other person without our prior written consent; provided that, any Lender may furnish this opinion letter or copies hereof (i) to bank examiners and other regulatory authorities should they so request in connection with their normal examinations, (ii) to the independent auditors and attorneys of any Lender, (iii) pursuant to order or legal process of any court or governmental agency, (iv) in connection with any legal action to which any Lender is a party arising out of the transactions contemplated by the Credit Documents, or (v) to any permitted assignee of or participant in the interest of any Lender under the Credit Documents for its information.

Very truly yours,

José Luis Ambrosy

6

SCHEDULE 1

Constitutional Deeds and By-Laws of Adexus

1. Constitutional deed of Tandem Chile S.A. (today, Adexus S.A.) by means of a public deed dated May 18, 1990, granted in the office of the Notary Public of Santiago Mr. Aliro Veloso Muñoz. An excerpt of such public deed was registered in the Registro de Comercio of 1990 of the Conservador de Bienes Raíces y Comercio de Santiago on May 25, 1990, on page 13,651 No. 6,885 and published in the Official Gazette on May 29, 1990;

2. Amendment to the by-laws of Tandem Chile S.A. (today, Adexus S.A.), executed by means of a public deed dated December 20, 1996, granted in the office of the Notary Public of Santiago Mr. José Musalem Saffie. An excerpt of such public deed was registered in the Registro de Comercio of 1997 of the Conservador de Bienes Raíces y Comercio de Santiago on January 23, 1997, on page 1,744 No. 2,188 and published in the Official Gazette on January 30, 1997;

3. Amendment to the by-laws of Tandem Chile S.A. (today, Adexus S.A.), executed by means of a public deed dated October 16, 1998, granted in the office of the Notary Public of Santiago Mr. José Musalem Saffie. An excerpt of such public deed was registered in the Registro de Comercio of 1998 of the Conservador de Bienes Raíces y Comercio de Santiago on October 20, 1998, on page 25,634 No. 20,489 and published in the Official Gazette on October 22, 1998;

4. Amendment to the by-laws of Adexus S.A., executed by means of a public deed dated March 5, 2002, granted in the office of the Notary Public of Santiago Mr. José Musalem Saffie. An excerpt of such public deed was registered in the Registro de Comercio of 2002 of the Conservador de Bienes Raíces y Comercio de Santiago on March 27, 2002, on page 7,968 No. 6,497 and published in the Official Gazette on April 1, 2002;

5. Amendment to the by-laws of Adexus S.A., executed by means of a public deed dated May 10, 2002, granted in the office of the Notary Public of Santiago Mr. José Musalem Saffie. An excerpt of such public deed was registered in the Registro de Comercio of 2002 of the Conservador de Bienes Raíces y Comercio de Santiago on page 12,909, No. 10,686 and published in the Official Gazette on May 25, 2002;

6. Capital reduction in Adexus S.A., certified by means of a public deed dated August 11, 2005, granted in the office of the Notary Public of Santiago Mr. José Musalem Saffie;

7. Amendment to the by-laws of Adexus S.A., executed by means of a public deed dated October 17, 2008, granted in the office of the Notary Public of Santiago Mr. José Musalem Saffie. An excerpt of such public deed was registered in the Registro de

7

Comercio of 2008 of the Conservador de Bienes Raíces y Comercio de Santiago on November 4, 2008, on page 51,324 No. 35,438 and published in the Official Gazette on November 7, 2008;

8. Amendment to the by-laws of Adexus S.A., executed by means of a public deed dated December 30, 2013, granted in the office of the Notary Public of Santiago Mr. José Musalem Saffie. An excerpt of such public deed was registered in the Registro de Comercio of 2014 of the Conservador de Bienes Raíces y Comercio de Santiago on February 20, 2014, on page 14,580 No. 9,143 and published in the Official Gazette on February 20, 2014;

9. Amendment to the by-laws of Adexus S.A., executed by means of a public deed dated August 21, 2014, granted in the office of the Notary Public of Santiago Mr. José Musalem Saffie. An excerpt of such public deed was registered in the Registro de Comercio of 2014 of the Conservador de Bienes Raíces y Comercio de Santiago on October 2, 2014, on page 74,263 No. 45,209;

10. Amendment to the by-laws of Adexus S.A., executed by means of a public deed dated August 4, 2015, granted in the office of the Notary Public of Santiago Mr. Víctor Olguín Peña. An excerpt of such public deed was registered in the Registro de Comercio of 2015 of the Conservador de Bienes Raíces y Comercio de Santiago on August 12, 2015, on page 58,821 No. 34 and published in the Official Gazette on August 17, 2015;

11. Amendment to the by-laws of Adexus S.A., executed by means of a public deed dated December 28, 2015, granted in the office of the Notary Public of Santiago Mr. Víctor Olguín Peña. An excerpt of such public deed was registered in the Registro de Comercio of 2016 of the Conservador de Bienes Raíces y Comercio de Santiago on January 18, 2016, on page 3,862 No. 2,326; and

12. Good Standing Certificate (Certificado de Vigencia) of Adexus S.A. dated as of July 23, 2019, issued by the Conservador de Bienes Raíces y Comercio de Santiago.

8

SCHEDULE 2

Shareholder, Board of Directors Resolutions and Powers of Attorney

1. Minutes of the Extraordinary Board of Directors’ Meeting of Adexus held on August 4, 2015; April 20, 2017; and April 23, 2019.

2. Minutes of the Extraordinary Shareholders’ Meeting of Adexus held on December 30, 2013 and recorded into public deed in the office of the Notary Public of Santiago Mr. José Musalem Saffie.

3. Power of attorney of the Borrower, which authorizes the persons indicated thereby to execute and deliver, and perform under, the First Lien Chilean Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement, granted on July 19, 2019 before the public notary of the city of Lima, Peru, Mr. Luis Dannon Brender, duly apostilled.

9

SCHEDULE 3

Registrations and other Formalities to create and maintain the First Lien Chilean

Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement

(i) Formalities obtained or accomplished:

1. Execution of public deeds of the First Lien Chilean Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement before a Chilean notary public;

2. Delivery of the certificate issued by the general manager of Adexus regarding the stock certificates of the Shares owned by the Shareholder pledged under the First Lien Chilean Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement to the Lenders;

3. Notarization and annotation of the First Lien Chilean Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement in the Shareholders’ Registry of Adexus by means of a Chilean notary public’s certification; and

4. Registration of the pledges without conveyance constituted by virtue of the First Lien Chilean Share Pledge Agreement and the Second Lien Chilean Share Pledge Agreement in the Registro de Prendas sin Desplazamiento (Pledge Without Conveyance Registry) kept by the Servicio de Registro Civil e Identificación (Civil Registry and Identification Service).

(ii) Formalities with respect to future shares:

1. In connection with pledges over future shares in Adexus, pursuant to the terms and conditions of the First Lien Chilean Share Pledge Agreement: (a) execution by the Borrower, Concar and Adexus of a declaration deed identifying the new shares acquired and declaring they are pledged as provided under the First Lien Chilean Share Pledge Agreement; (b) annotation of the pledge of shares in the Shareholders’ Registry of Adexus by means of a notary public’s certification; (c) delivery of the certificate issued by the general manager of Adexus regarding the stock certificates of the Shares owned by the Shareholder pledged under such pledge of shares to the Lenders; and (d) registration of the declaration deed in the Registro de Prendas sin Desplazamiento (Pledge Without Conveyance Registry) kept by the Servicio de Registro Civil e Identificación (Civil Registry and Identification Service).

10

Exhibit F

FORM OF ASSIGNMENT AND

ASSUMPTION AGREEMENT

ASSIGNMENT AND ASSUMPTION AGREEMENT

This Assignment and Assumption Agreement (this “Agreement”) is dated as of the Effective Date set forth below and is entered into by and between the Assignor identified in item 1 below (the “Assignor”) and [the][each]1 Assignee identified in item 2 below ([the][each, an] “Assignee”). [It is understood and agreed that the rights and obligations of [the Assignees] hereunder are several and not joint.]2 Capitalized terms used but not defined herein shall have the meanings given to them in the Loan Agreement identified below, receipt of a copy of which is hereby acknowledged by [the][each] Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto (the “Standard Terms and Conditions”) are hereby agreed to and incorporated herein by reference and made a part of this Agreement as if set forth herein in full.

For an agreed consideration, the sufficiency and receipt of which is hereby acknowledged, the Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Loan Agreement, as of the Effective Date inserted by the Assignor as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Loan Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the facility identified below, but excluding accrued principal, interest and fees, in each case owed or owing prior to but excluding the Effective Date and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Loan Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by the Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”). Each such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Agreement, without representation or warranty by the Assignor.

1.	Assignor:
2.	Assignee[s]:

¹  For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language.

²  Include bracketed language if there are multiple Assignees.

Exhibit F

Page 2

3.	Borrower:	Graña y Montero S.A.A.
4.	Loan Agreement:	The Loan Agreement, dated as of July 31, 2019 (as amended, restated, amended and restated, supplemented and/or otherwise modified from time to time, the “Loan Agreement”), between the Borrower and the Lenders from time to time party thereto.
5	Assigned Interest[s]:

Assignor	Assignee[s]3	Aggregate Amount of Commitments / Loans for all Lenders4	Amount of Commitments / Loans Assigned	Percentage Assigned of Commitments / Loans5
		$	$	%
		$	$	%
		$	$	%

[6	Trade Date:	]6
	Assignor Information		Assignee[s] Information

Payment Instructions: Payment Instructions:

³  List each Assignee, as appropriate.

⁴  Amount to be adjusted by the counterparties to take into account any payments, prepayments or repayments made between the Trade Date and the Effective Date.

⁵  Set forth, to at least nine decimal places, as a percentage of the Commitments/Loans of Lenders thereunder.

⁶  To be completed if the Assignor and Assignee(s) intend that the minimum assignment amount is to be determined as of the Trade Date.

Exhibit F

Page 3

	Reference:		Reference:
Notice Instructions:		Notice Instructions:
	Reference:		Reference:

Effective Date:                 ,            

The terms set forth in this Agreement are hereby agreed to as of the Effective Date:

ASSIGNOR
[NAME OF ASSIGNOR]
By:
	Name: Title:

ASSIGNEE[S]7
[NAME OF ASSIGNEE]
By:
	Name: Title:

[NAME OF ASSIGNEE]
By:
	Name: Title:

⁷  Add additional signature blocks as needed.

Exhibit F

Page 4

[Consented to:]

[Graña y Montero S.A.A., as Borrower]8

By:
	Name: Title:

⁸  To be included when the Borrower’s consent is required pursuant to Section 10.04(b) of the Loan Agreement.

Exhibit F

Page 5

ANNEX 1

[                    ]⁹

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION AGREEMENT

1.           Representations and Warranties.

1.1         Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) the outstanding balances of its Loans, in each case, without giving effect to assignments thereof which have not become effective, are as set forth in (a) above, the Assignor makes no representation or warranty and it has full power and authority, and has taken all action necessary, to execute and deliver this Agreement and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Loan Agreement or any other Credit Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Agreement, any other Credit Document or any other instrument or document delivered pursuant thereto (other than this Agreement) or any collateral thereunder, (iii) the financial condition of the Borrower or any Main Subsidiary, any of their respective Affiliates or any other Person obligated in respect of any Credit Document or (iv) the performance or observance by the Borrower or any Main Subsidiary, any of their respective Affiliates or any other Person of any of their respective obligations under any Credit Document.

1.2         Assignee[s]. [The][Each] Assignee (a) represents and warrants that (i) has full power and authority, and has taken all action necessary, to execute and deliver this Agreement and to consummate the transactions contemplated hereby and to become a Lender under the Loan Agreement, (ii) it meets all the requirements to become an assignee under Section 10.04(b) of the Loan Agreement, (iii) from and after the Effective Date, it shall be bound by the provisions of the Loan Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Loan Agreement and the other Credit Documents to which the Assignor[s] [was][were] party, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 7.01(a) of the Loan Agreement, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Agreement and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and to purchase [the][such]

⁹  Describe Loan Agreement at option of Lender.

Exhibit F

Page 6

Assigned Interest, (vii) attached to this Agreement is any documentation required to be delivered by it pursuant to the terms of the Loan Agreement, duly completed and executed by the Assignee, and (viii) if it is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is formed (or any treaty to which such jurisdiction is a party), attached hereto is any documentation required to be delivered by it pursuant to the terms of the Loan Agreement duly completed and executed by [the][such] Assignee; and (b) agrees that it will, independently and without reliance on the Assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Documents, and (iii) it will perform in accordance with their terms all of the obligations which by the terms of the Credit Documents are required to be performed by it as a Lender.

2.         Payments. From and after the Effective Date, the Borrower shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees, commissions and other amounts (including any Make-Whole Premium)) to the Assignor for amounts which have accrued to but excluding the Effective Date and to [the][each] Assignee for amounts which have accrued from and after the Effective Date. Each party hereto agrees that it will hold any interest, fees, or other amounts that it may receive to which the other party hereto shall be entitled pursuant to the preceding sentence for account of such other party and pay, in like money and funds, any such amounts that it may receive to such other party promptly upon receipt.

3.         Acknowledgment. [The][Each] Assignee hereby acknowledges and affirms that it is bound by the provisions of Section 10.04 of the Loan Agreement.

4.         Effect of Assignment. Upon the delivery of fully executed counterparts hereof, as of the Effective Date, (i) [the][each] Assignee shall be a party to the Loan Agreement and, to the extent provided in this Agreement, have the rights and obligations of a Lender thereunder and under the other Credit Documents and (ii) the Assignor shall, to the extent provided in this Agreement, relinquish its rights (except those rights which expressly survive assignment pursuant to the Loan Agreement) and be released from its obligations to the extent of the Assigned Interest under (or if the Assigned Interest covers all of the Assignor’s rights and obligations under the Loan Agreement, cease to be a party to) the Loan Agreement and the other Credit Documents.

5.         General Provisions. This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by electronic imaging shall be effective as delivery of a manually executed counterpart of this Agreement. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION).

Exhibit G

FORM OF FIRST LIEN CHILEAN SHARE PLEDGE AGREEMENT

(Attached)

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

REPERTORIO Nº

PRENDA SIN DESPLAZAMIENTO DE PRIMER GRADO

SOBRE ACCIONES DE ADEXUS S.A

POR

GRAÑA Y MONTERO S.A.A.

En Santiago de Chile, a [●] del año dos mil diecinueve, ante mí, PATRICIO RABY BENAVENTE, Abogado, Notario Público, Titular de la Quinta Notaría de Santiago, con domicilio en Gertrudis Echenique número treinta, Oficina treinta y dos, Las Condes, Santiago, COMPARECEN: /Uno/ Don Enzo Rodrigo Contreras Órdenes, chileno, casado, ingeniero comercial, cédula de identidad número once millones novecientos cincuenta y dos mil quinientos cincuenta y seis guion K , en representación, según se acreditará, de GRAÑA Y MONTERO S.A.A., una sociedad constituida y existente de conformidad a las leyes de la República del Perú, Rol Único Tributario número cincuenta y nueve millones ciento sesenta y cinco mil ochocientos noventa guion cinco, todos domiciliados para estos efectos en [●], en adelante también indistintamente el “Deudor”; o el “Constituyente”. /Dos/ don Sergio Morales Contreras, chileno, casado, ingeniero civil industrial, cédula de identidad número diez millones seiscientos veintinueve mil ochocientos setenta y cinco guion cero, y don Enzo Contreras Órdenes, chileno, casado, ingeniero comercial, cédula de identidad número once millones novecientos cincuenta y dos mil quinientos cincuenta y seis guion K, ambos en representación, según se acreditará, de ADEXUS S.A., una sociedad anónima constituida y existente de conformidad

1

a las leyes de la República de Chile, Rol Único Tributario número noventa y seis millones quinientos ochenta mil sesenta guion tres, todos domiciliados para estos efectos en Miraflores trescientos ochenta y tres, piso veinte, comuna de Santiago, en adelante también la “Sociedad”/. /Tres/ don Jaime Andrés Salas Vergara, chileno, casado, abogado, cédula de identidad número quince millones trescientos doce mil ochocientos cincuenta y dos guion nueve, en representación, según se acreditará, de CS PERU INFRASTRUCTURE HOLDINGS LLC, una sociedad constituida y existente de conformidad a las leyes de Delaware, Estados Unidos de América, todos domiciliados para estos efectos en Apoquindo tres mil setecientos veintiuno, piso catorce, Las Condes, Región Metropolitana /en adelante, el “Acreedor”, y en conjunto con el Constituyente y la Sociedad, las “Partes”/; todos los comparecientes, mayores de edad, quienes acreditan su identidad con las cédulas de identidad antes citadas y exponen que han convenido en celebrar un contrato de prenda sin desplazamiento de primer grado sobre acciones, en adelante indistintamente denominado el “Contrato”, en los términos y condiciones que se estipulan en este instrumento: CLÁUSULA PRIMERA: ANTECEDENTES. Uno.Uno. Contrato de Crédito. Por instrumento privado de fecha [●], el Deudor suscribió con el Acreedor un contrato de crédito en idioma inglés, regido por las leyes del Estado de Nueva York, Estados Unidos de América /en adelante, el “Contrato de Crédito”/, una copia del cual se ha protocolizado con esta misma fecha bajo el repertorio número [●] en esta

2

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

Notaría, y que se considera parte integrante de este instrumento. Conforme al Contrato de Crédito, el Acreedor, en su calidad de Acreedor Inicial /“Initial Lender”/, y cada una de las instituciones financieras /“Lenders”/ que adquirieran el todo o parte del Compromiso /“Commitment”/ del Acreedor /conjuntamente con el Acreedor, los “Acreedores”/, acordaron otorgar un préstamo al Deudor que, en total, no superen el monto del Compromiso /en adelante, el o los préstamos otorgados por los Acreedores se denominarán indistintamente los “Préstamos”/, según el Deudor así lo requiera por escrito y sujeto además al cumplimiento de las condiciones contenidas en el Contrato de Crédito. Conforme a la definición de dicho término en el Contrato de Crédito, el Compromiso asciende a un monto máximo de treinta y cinco millones de dólares de los Estados Unidos de América /en adelante, “Dólares”/. Uno.Dos. Conforme a lo dispuesto en la cláusula dos punto cero cuatro del Contrato de Crédito, se llevará registro del capital y los intereses de los Préstamos desembolsados en un registro que llevarán los Acreedores y que, a petición suya, deberán evidenciarse, alternativamente, en un pagaré suscrito por el Deudor ya sea bajo las leyes del Estado de Nueva York, Estados Unidos de América, o bajo las leyes de la República del Perú /en adelante, los “Pagarés”/, pudiendo ejercerse las acciones que de ellos se deriven, en la época y en la forma que tales Pagarés establezcan. Las Partes dejan constancia que para ejercer las preferencias y demás derechos derivados de este contrato no será necesario

3

acreditar frente a terceros que los Pagarés documentan obligaciones emanadas del Contrato de Crédito. Para efectos de dar cumplimiento a lo dispuesto en el artículo tercero, numeral dos, del artículo catorce de la Ley número veinte mil ciento noventa /en adelante la “Ley de Prenda sin Desplazamiento”/, el Constituyente estará obligado a suscribir una escritura de declaración, en términos sustancialmente similares al instrumento que como Anexo Uno se protocoliza conjuntamente a la presente escritura, bajo el mismo número de repertorio del presente instrumento, destinado a individualizar los Pagarés tan pronto éstos lleguen a ser suscritos por el Deudor, y en todo caso dentro de los treinta días corridos siguientes a la suscripción de los mismos. La referida escritura deberá incluir, como anexo protocolizado bajo el mismo número de repertorio de dicha escritura, una copia simple de los Pagarés que en ella se individualicen. Uno.Tres. Pago de los Préstamos. Conforme al Contrato de Crédito, el Deudor se obligó a pagar los Préstamos desembolsados en siete cuotas trimestrales y sucesivas, siendo la primera cuota pagadera al décimo octavo mes luego de la Fecha de Cierre /“Closing Date”/. Cada una de las cuotas ascenderá a un monto equivalente al catorce coma veintinueve por ciento del capital total pendiente de pago de los Préstamos desembolsados más los intereses correspondientes y será pagadera conforme a la participación de cada uno de los Acreedores en los Préstamos. Uno.Cuatro. Intereses. A. Tasa de Interés. El Contrato de Crédito establece que el Deudor se obliga

4

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

a pagar intereses desde el día del respectivo desembolso hasta el día del vencimiento del Préstamo correspondiente, a una tasa de interés anual igual a la Tasa Applicable /Applicable Rate/, aplicando en cada caso el que esté vigente de tiempo en tiempo. “Tasa Aplicable” significa: /i/ ocho coma nueve cero por ciento por el período desde e incluyendo la Fecha de Cierre hasta pero excluyendo el día correspondiente a seis meses después de la Fecha de Cierre; /ii/ nueve coma uno cinco por ciento por el período desde e incluyendo el día correspondiente a seis meses después de la Fecha de Cierre hasta pero excluyendo el día correspondiente a un año después de la Fecha de Cierre; /iii/ nueve coma cuatro cero por ciento por el período desde e incluyendo el día correspondiente a un año después de la Fecha de Cierre hasta pero excluyendo el día correspondiente a treinta meses después de la Fecha de Cierre; y /iv/ nueve coma nueve cero por ciento incluyendo el día correspondiente a treinta meses después de la Fecha de Cierre hasta pero excluyendo el día correspondiente a tres años después de la Fecha de Cierre. B. Pago de intereses. Los intereses que devenguen los Préstamos se pagarán /a/ trimestralmente, en cada Fecha de Pago Trimestral, según ésta se define más adelante; /b/ en la fecha en que se prepague o repague dicho préstamo; y /c/ en el día del vencimiento de dicho préstamo /por aceleración o por otra causa/, y se calcularán sobre el capital insoluto de cada Préstamo, devengándose por períodos vencidos, en base al número de días efectivamente transcurridos, sobre la

5

base de un año de trescientos sesenta y cinco o trescientos sesenta y cinco días, según corresponda. Sin perjuicio de lo anterior, en caso de repagar íntegramente un Préstamo en el mismo día en que se desembolsó al Deudor, dicho préstamo devengará intereses correspondientes a un día. La “Fecha de Pago Trimestral” significa cada treinta y uno de marzo, treinta de junio, treinta de septiembre y treinta y uno de diciembre de cada año. Uno.Cinco. Otras estipulaciones. El Contrato de Crédito contempla además, el pago de intereses penales sobre montos adeudados e insolutos o morosos, el pago por parte del Deudor del aumento de los costos para los Acreedores de otorgar y mantener los Préstamos; el pago de comisiones, gastos, honorarios, costas y otras sumas, y, asimismo, regula las obligaciones de hacer y de no hacer, los eventos que motivarán prepagos obligatorios y los casos de incumplimiento que, de ocurrir, sujeto a los términos y condiciones de dicho instrumento, permitirán a los Acreedores a declarar todo o parte del saldo adeudado de los Préstamos o cualquier otra obligación como de plazo vencido e inmediatamente exigibles. Dos. Con el objeto de documentar las obligaciones contraídas con los Acreedores, el Deudor celebró y celebrará una serie de contratos, y contrajo y contraerá diversas obligaciones, las cuales se encuentran documentadas en los documentos del financiamiento /“Credit Documents”/ /en adelante, los “Documentos del Financiamiento”/, entre los cuales se incluyen sin limitación, los siguientes: /a/ el Contrato de Crédito; /b/ los Pagarés /“Notes”/; /c/ la Carta de

6

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

Honorarios /“Fee letter”/; /d/ el Acuerdo de Fideicomiso del Acreedor /“Lender Trust Agreement”/; /e/ el Acuerdo de Indemnidad /“Indemnity Agreement”/; /f/ el Acuerdo de Fideicomiso de Pago /“Payment Trust Agreement”; /g/ el contrato de prenda sin desplazamiento de segundo grado sobre acciones de la Sociedad que actualmente se encuentran gravadas en favor de las sociedades Ameris Deuda Directa Fondo de Inversión y Falcom Fondo de Inversión Falcom Chilean Fixed Income /los “Acreedores de Primer Grado”; /h/ este Contrato; y /i/ cualesquiera otro contrato o acuerdo que sea designado por los Acreedores de tiempo en tiempo como un Documento del Financiamiento bajo el Contrato de Crédito. Cada una de las obligaciones de pago o de otra naturaleza del Deudor bajo los Documentos del Financiamiento referidas en esta cláusula y bajo cualquier otro instrumento que suscriba o acepte, o pudiere suscribir o aceptar en el futuro para documentar tales obligaciones de pago, y todas y cualesquiera obligaciones de pago que pueda adeudar o contraer en el futuro, directa o indirectamente, en favor de los Acreedores con motivo de los Documentos del Financiamiento, incluyendo capital, reajustes, intereses pactados, intereses penales, comisiones, honorarios, costas, gastos, derechos, cargos y recargos, y cualquier otra obligación en la que incurra el Deudor, de tiempo en tiempo, en relación con los Documentos del Financiamiento, se denominarán en adelante una “Obligación Garantizada” y colectivamente las “Obligaciones Garantizadas”. Tres. A menos que se disponga lo contrario, cualquier referencia en el

7

presente contrato a cualquier persona incluirá a sus sucesores y cesionarios permitidos. Todos los términos definidos en su forma singular tendrán el mismo significado cuando sean usados en su forma plural y viceversa, con excepción de los términos Acreedor y Acreedores, que tendrán el significado otorgado en este instrumento a cada uno. – CLÁUSULA SEGUNDA: SOCIEDAD Y ACCIONES. Uno/ El Deudor es dueño de trescientas treinta y cuatro mil cuatrocientas noventa y nueve acciones emitidas por la Sociedad, suscritas e íntegramente pagadas, inscritas a su nombre en el folio número nueve del registro de accionistas de la Sociedad y que constan en los títulos números [●]/ en adelante, las “Acciones”/. – CLÁUSULA TERCERA: PRENDA SIN DESPLAZAMIENTO DE PRIMER GRADO SOBRE ACCIONES. Tres Uno. Prenda sin Desplazamiento de Primer Grado. Por el presente instrumento, y con el objeto de garantizar el cumplimiento íntegro, efectivo y oportuno por parte del Deudor de todas y cada una de las Obligaciones Garantizadas, el Constituyente, debidamente representado en la forma indicada en la comparecencia, constituye a favor de los Acreedores: /a/ prenda sin desplazamiento de primer grado sobre doscientas noventa y seis mil quinientas setenta acciones, que corresponden aproximadamente al ochenta y ocho coma seis seis uno por ciento de las acciones de la Sociedad, y que constan en los títulos [●] y [●] / las “Acciones en Garantía”/, de conformidad a la normativa contenida en el artículo catorce de la Ley veinte mil ciento noventa /en adelante, la “Ley de Prenda sin Desplazamiento”/, al

8

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

Reglamento del Registro de Prendas sin Desplazamiento, contenido en el Decreto Supremo número setecientos veintidós, de fecha ocho de septiembre de dos mil diez, emitido conjuntamente por el Ministerio de Justicia y el Ministerio de Hacienda, publicado en el Diario Oficial del día veintitrés de octubre de dos mil diez /en adelante, el “Reglamento de Prenda sin Desplazamiento”/, y a los términos y condiciones contenidos en el presente instrumento; y /b/ prenda sin desplazamiento de primer grado de conformidad al artículo noveno de la Ley de Prenda sin Desplazamiento, al Reglamento de Prenda sin Desplazamiento y a los términos y condiciones del presente instrumento, sobre todas las acciones que se emitan por la Sociedad y que el Constituyente suscriba o adquiera por cualquier causa en el futuro /en adelante también, las “Acciones Futuras”, y conjuntamente con las Acciones en Garantía, las “Acciones Prendadas”/. Conforme a lo establecido en el artículo noveno de la Ley de Prenda sin Desplazamiento, el derecho real de prenda sobre las Acciones Futuras se adquirirá una vez que éstas sean suscritas por el Constituyente, y se entenderá constituido el derecho real de prenda desde la fecha de la inscripción del presente instrumento en el Registro de Prendas sin Desplazamiento. En adelante, la prenda sin desplazamiento de primer grado que se constituye en esta cláusula tercera se denominará la “Prenda sobre Acciones”. Tres.Dos. Extensión de la Prenda sobre Acciones. /a/ La Prenda sobre Acciones que se constituye por el presente Contrato se extiende y garantiza a los

9

intereses, incluso penales, a las comisiones, honorarios y a las demás obligaciones accesorias a las Obligaciones Garantizadas a favor de los Acreedores, lo que incluye, sin que la enunciación que sigue implique limitación, obligaciones por concepto de costas, gastos, honorarios, indemnización de perjuicios, contribuciones, derechos, cargas, retenciones, remuneraciones, aumentos de costos, cargos financieros, gastos reembolsables, desembolsos y por cualquier otro concepto, así como cualquier otra obligación contraída por el Deudor que hayan caucionado las Obligaciones Garantizada, en favor de los Acreedores; y garantizan también las prórrogas, renovaciones y modificaciones que puedan ser acordadas con respecto a las obligaciones que en este acto se garantizan, y en general, el íntegro y oportuno cumplimiento de todas las obligaciones derivadas de las Obligaciones Garantizadas por el ministerio de la ley; ya sea que dichas obligaciones sean de la esencia, de la naturaleza o meramente accidentales de los actos y contratos de que emanen; y sea que su cumplimiento sea exigible en las épocas convenidas o anticipadamente, en el evento de su aceleración. Garantizan, asimismo, el reembolso de las costas y gastos de cobranza, judiciales o extrajudiciales, incluidos honorarios de abogados, si existieren, en que los Acreedores, incurran con ocasión de gestiones o demandas de cobro o ejecución de la Prenda sobre Acciones. /b/ La Prenda sobre Acciones se extiende, además, a toda obligación que conste en instrumentos que pueda otorgar o aceptar el Constituyente que haya caucionado las Obligaciones

10

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

Garantizadas, en el futuro, en sustitución o reemplazo, o bien, en forma adicional, a aquellos que hayan sido suscritos y entregados a los Acreedores, en virtud del Contrato de Crédito, los Pagarés que se suscriban al efecto, incluidas sus eventuales hojas de prolongación y/o cualquier otro Documento del Financiamiento, como asimismo en virtud de cualquier otro documento que en el futuro pudiere complementar dichos documentos. /c/ La Prenda sobre Acciones, restricciones y prohibiciones constituidas en virtud del presente Contrato incluye y se extiende a todos los aumentos de valor de las Acciones Prendadas y a cada uno de los derechos patrimoniales que confieran a sus titulares y comprenden desde luego todos los frutos y beneficios que ellas puedan generar o producir, incluyendo, sin que la enunciación que sigue implique limitación, dividendos y ganancias, acciones liberadas de pago, derechos preferentes u opciones de cualquier naturaleza, ya sean de suscripción preferente de acciones, de bonos convertibles en acciones o de cualesquiera otros valores que confieran derechos futuros sobre la Sociedad. Por el presente acto, el Constituyente faculta en forma irrevocable a los Acreedores, por cuenta de quienes acepta su mandatario individualizado en la comparecencia, para que requiera de la Sociedad y retire y reciba de ésta los nuevos títulos de acciones u otros valores que puedan emitirse como consecuencia de una emisión de acciones liberadas de pago o de canje de acciones por la emisión de nuevos títulos de acciones con valor nominal, quedando inhibido el Constituyente de dicha gestión y prohibido a la

11

Sociedad entregarlos a otra persona que no sean los Acreedores, debiendo además, la Sociedad, inscribir la prenda y prohibición de estos nuevos títulos en el Registro de Accionistas a sola petición de los Acreedores con sujeción al Contrato de Crédito, lo que no será necesario acreditar ante terceros, o de Notario Público. Tres.Tres. Las Partes declaran que el monto de las Obligaciones Garantizadas en favor de los Acreedores por esta escritura, asciende a la suma de treinta y cinco millones de Dólares, que incluye el monto adeudado por concepto de capital e intereses bajo el Contrato de Crédito y Pagarés. Tres.Cuatro. Asimismo, y en cuanto sea necesario en derecho confirmarlo en el presente Contrato, en caso de expropiación de las Acciones Prendadas, la Prenda sobre Acciones y prohibiciones constituidas en virtud del presente instrumento se extenderán al derecho del Deudor de recibir indemnización por causa de dicha expropiación; indemnización que subrogará a las Acciones Prendadas para todos los efectos legales y contractuales a que haya lugar. Tres.Cinco. Por el presente acto, los Acreedores aceptan la Prenda sobre Acciones de que da cuenta esta escritura y adquiere el respectivo derecho real de prenda. – CLÁUSULA CUARTA: DECLARACIONES DEL CONSTITUYENTE. El Constituyente, debidamente representado de la manera indicada en la comparecencia de este instrumento, declara en beneficio de los Acreedores que: /Uno/ Se encuentra debidamente facultados para hacer las declaraciones que esta escritura contiene y para otorgar el presente Contrato,

12

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

y que esta escritura ha sido debidamente suscrita por el Constituyente y que de ella emanan obligaciones legales, válidas y exigibles para este; /Dos/ Las Acciones Prendadas son de exclusivo dominio del Constituyente, estando debidamente inscritas a su nombre en el Registro de Accionistas de la Sociedad y encontrándose todas ellas debida y completamente suscritas y pagadas; y que, salvo por la prenda y prohibiciones constituidas por el presente instrumento o lo permitido bajo los Documentos del Financiamiento, no están afectas a gravámenes, cargas, litigios, prohibiciones de gravar y enajenar u otras restricciones, embargos, medidas prejudiciales o precautorias, acciones resolutorias y derechos preferentes de terceros, y que no están sujetas a otros impedimentos que afecten su libre disposición o la constitución y perfeccionamiento de la Prenda sobre Acciones y prohibiciones de que da cuenta el presente instrumento y que no tienen restricciones legales de naturaleza alguna que le impidan celebrar el presente instrumento; y que no se encuentran afectas a opciones, promesas de venta, ventas condicionales o a plazo ni a ningún otro acto o contrato que tienda o que tenga por objeto transferir el dominio de las Acciones Prendadas o darlas en garantía de otras obligaciones, y que no existe impedimento alguno que pueda afectar su libre disposición o la constitución de esta Prenda sobre Acciones y prohibiciones; /Tres/ La celebración, cumplimiento y ejecución de esta Prenda sobre Acciones no vulnera ningún contrato ni acuerdo celebrado entre

13

el Constituyente y los demás accionistas de la Sociedad, ni ninguna ley, reglamento, juicio, orden o decreto obligatorio, reglamento o norma reglamentaria o administrativa para aquél, ni provoca ningún incumplimiento de, ni constituye ninguna falta a los estatutos societarios del Constituyente o cualquier contrato, hipoteca, garantía, préstamo u otro convenio o instrumento del cual el Constituyente sea parte o del cual emanen obligaciones para éste o que limiten la disposición de sus bienes; y que no se requiere de ninguna autorización, aprobación o notificación gubernamental ni de terceros para su celebración, pleno cumplimiento y ejecución, salvo por la inscripción de este contrato en el Registro de Prenda sin Desplazamiento; y /Cuatro/ Las Acciones Prendadas representan a esta fecha aproximadamente el ochenta y ocho coma seis seis uno por ciento de las acciones emitidas, suscritas y con derecho a voto de la Sociedad, que le confieren como titular y dueño el derecho a percibir las utilidades y cualquier otro beneficio económico a ser distribuido por la Sociedad a sus accionistas, como también al ejercicio de los derechos de voto correspondientes. – CLÁUSULA QUINTA: PROHIBICIÓN DE GRAVAR Y ENAJENAR. El Constituyente, por este acto y debidamente representado de la manera indicada en la comparecencia de este instrumento, se obliga, a favor de los Acreedores, a no gravar, enajenar, disponer o celebrar acto o contrato alguno, respecto de todo o parte de las Acciones Prendadas, sin la autorización previa y escrita de los Acreedores, salvo por lo

14

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

dispuesto en la cláusula siete punto dieciocho del Contrato de Crédito y el Contrato de Fideicomiso, según éste se define más adelante. Las Partes comparecientes declaran que por “gravar” se entenderá la constitución de cualquier caución o garantía real o cualquier carga, gravamen, prohibición, derecho en favor de terceros, embargo, impedimento o restricción que pudiere afectar o embarazar el libre uso, goce o disposición de las Acciones Prendadas en la Sociedad. – CLÁUSULA SEXTA: ENTREGA, INSCRIPCIÓN Y NOTIFICACIÓN EN EL REGISTRO DE ACCIONISTAS. Seis.Uno. El Constituyente hace entrega en este acto al Acreedor, de un certificado emitido por la Sociedad donde consta la propiedad sobre las Acciones en Garantía, declarando el Acreedor haberlo recibido a su entera satisfacción. Seis.Dos. La Prenda sobre Acciones y prohibición que por este instrumento se constituye deberán ser registrada, a costa de la Sociedad, en todos los registros que correspondan de acuerdo a la naturaleza de las Acciones Prendadas que se prendan por el presente instrumento y, en especial, en el Registro de Prendas sin Desplazamiento, de acuerdo a lo establecido en el artículo veinticuatro de la Ley de Prenda sin Desplazamiento. Seis.Tres. La Prenda sobre Acciones y prohibición contenidas en el presente instrumento serán notificadas, registradas e inscritas en el Registro de Accionistas de la Sociedad, por un Notario Público, conforme al Artículo veintitrés de la Ley número dieciocho mil cuarenta y seis, sobre sociedades anónimas, inmediatamente otorgada esta Prenda sobre Acciones y prohibición. – CLÁUSULA SÉPTIMA:

15

DERECHOS, BENEFICIOS Y PRIVILEGIOS DE LOS ACREEDORES. Siete.Uno. Derechos del Constituyente en ausencia de una causal de incumplimiento. /a/ Sin perjuicio de lo dispuesto en la sección Nueve.Cinco siguiente, en tanto no ocurra una Causal de Incumplimiento /“Event of Default”/ conforme al Contrato de Crédito o cualquiera de los Documentos del Financiamiento, el Constituyente conservará el pleno ejercicio de los derechos que como legítimo titular de las Acciones Prendadas le corresponde, incluidos el ejercicio del derecho a participar en las juntas de accionistas con derecho a voz y a voto, el derecho de cobrar y percibir dividendos en dinero de la Sociedad y el ejercicio de aquellos otros derechos que pudiere corresponderle, incluidos todos los derechos patrimoniales. /b/ Sin que implique limitación de lo anterior, el ejercicio de los derechos que correspondan a el Constituyente como legítimo titular de las Acciones Prendadas se efectuará de una manera consistente con lo establecido en el Contrato de Crédito. /c/ El Constituyente, en toda reforma a los estatutos de la Sociedad que se someta a su consideración en la junta de accionistas que se convoque al efecto, o en cualquier otra materia que se someta a su consideración y, en ambos escenarios, que pueda alterar los gravámenes, restricciones y prohibiciones constituidos en virtud de este instrumento o una cualquiera de sus disposiciones, podrá votar aprobándolas siempre y cuando haya obtenido la autorización previa y por escrito de los Acreedores actuando con sujeción al Contrato de Crédito, lo que no

16

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

será necesario acreditar ante terceros, para lo cual el Constituyente deberá comunicarle por escrito la fecha de celebración de la respectiva junta general de accionistas, las materias a tratar en ella y la posición que estime aconsejable asumir, con a lo menos diez Días Hábiles de anticipación. Además, y sin perjuicio de lo expresado, será siempre necesaria la autorización previa y por escrito de los Acreedores en la forma antes indicada, para ejercer el derecho a retiro establecido en la Ley número dieciocho mil cuarenta y seis, sobre sociedades anónimas. Siete.Dos. Derechos del Constituyente si ocurre una causal de incumplimiento. /a/ En caso que ocurra una Causal de Incumplimiento conforme al Contrato de Crédito o de los demás Documentos del Financiamiento o que de cualquier forma no se dé cumplimiento íntegro, efectivo y oportuno a todas y cada una de las Obligaciones Garantizadas por la Prenda sobre Acciones de que da cuenta el presente instrumento, los Acreedores actuando de conformidad a los dispuesto en el Contrato de Crédito, lo que no será necesario acreditar ante terceros, previa comunicación escrita a el Constituyente y la Sociedad de haberse verificado alguna de tales circunstancias y a contar de la fecha de dicha notificación, con el sólo mérito de la misma y sin que deba acreditar a el Constituyente y la Sociedad el incumplimiento de que se trate, pasará a ejercer /pero no estará obligado a ejercer/ todos los derechos que legalmente tendría el Constituyente como legítimo titular de las Acciones Prendadas. En este caso, el Constituyente deberá abstenerse de ejercer

17

tales derechos, así como cualquier otro que les hubiese correspondido en razón de su participación accionaria en la Sociedad, todos los cuales pasarán de pleno derecho a ser ejercidos única y exclusivamente por los Acreedores. De la misma manera, el Constituyente prohíbe a la Sociedad pagar todo o parte de los dividendos que consistan en dividendos en dinero y demás beneficios a que se refiere esta cláusula, a los que se extiende automáticamente esta Prenda sobre Acciones conforme a lo señalado en el presente instrumento, en otras manos diversas de los Acreedores, a contar de la fecha en que se le practique la notificación a que se refiere la presente letra /a/, según lo dispuesto por el artículo dos mil trescientos ochenta y nueve del Código Civil. /b/ Para estos efectos, el Constituyente faculta en forma irrevocable a los Acreedores y sus sucesores y cesionarios, para que en los casos a que se refiere la letra /a/ precedente, ejerza el derecho a voz y voto que corresponde a las Acciones Prendadas /incluyendo el derecho a elegir directores de la Sociedad/ y cobre y perciba los dividendos y ganancias y demás beneficios a los cuales se extiende automáticamente esta prenda /incluyendo devoluciones de capital/. Los beneficios que así sean percibidos por los Acreedores deberán ser aplicados por éste al pago de las Obligaciones Garantizadas en conformidad con los Documentos del Financiamiento. /c/ El Constituyente declara que el poder de que da cuenta esta Sección Siete.Dos tiene el carácter de irrevocable, en los términos a que se refiere el Artículo doscientos cuarenta y uno del Código

18

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

de Comercio, por cuanto su ejecución interesa a los Acreedores. Siete.Tres. Los Acreedores, a contar de la fecha en que practique la notificación a que se refiere la Sección Siete.Dos /a/ anterior y en virtud del presente instrumento, prohíbe a la Sociedad pagar en otras manos diversas de los Acreedores, todo o parte de los dividendos que consistan en dividendos en dinero y demás beneficios a los que se extiende automáticamente esta prenda conforme a lo señalado en el presente instrumento. Siete.Cuatro. Los Acreedores, gozarán respecto del Constituyente y de terceros, de los beneficios, privilegios y preferencias que otorga la ley a los acreedores prendarios, sin perjuicio de los demás derechos y compensaciones establecidos en favor de los Acreedores bajo los Documentos del Financiamiento. Siete.Cinco. Sin perjuicio de lo indicado en las secciones Siete.Uno, Siete.Dos y Siete.Tres anteriores, en virtud de lo dispuesto en el Contrato de Fideicomiso de fecha [●], celebrado en la ciudad de Lima, y sujeto a ley de la República del Perú entre el Constituyente, La Fiduciaria S.A., el Acreedor y Daniel René Urbina, en sus calidades de fideicomitente, fiduciario, fideicomisario y depositario, respectivamente /en adelante, el “Contrato de Fideicomiso”/, por el presente acto y a partir de esta fecha el Constituyente viene en conferir mandato irrevocable a la Sociedad para que pague a La Fiduciaria S.A. todos los dividendos declarados, utilidades, devoluciones de capital y demás beneficios a los que se extiende automáticamente esta Prenda sobre Acciones conforme al presente instrumento

19

y que le correspondieren al Constituyente en su calidad de accionista de la Sociedad. Las sumas que se paguen a La Fiduciaria S.A. bajo el mandato conferido en esta sección se depositarán en la cuenta que para tales efectos indique la Fiduciaria S.A. a la Sociedad. La Sociedad, por medio de su representante, acepta el mandato irrevocable que se otorga en esta cláusula y se obliga a no renunciar al mismo sin el consentimiento escrito del Acreedor en cuyo beneficio ha sido otorgado. Lo dispuesto en esta sección primará sobre lo dispuesto en la sección Siete.Uno anterior, mientras esté vigente o no se haya puesto término anticipado al Contrato de Fideicomiso, circunstancia que no tendrá que ser acreditada ante terceros. Siete.Seis. En caso de que la prenda constituida en virtud de este instrumento sea ejecutada judicialmente por los Acreedores, el Constituyente se obliga por este acto a suspender el ejercicio de los derechos o acciones que le corresponda en contra de la Sociedad en virtud de la subrogación legal en los derechos de los acreedores prendarios para recibir pagos o repartos de activos de la Sociedad que se relacionen con la ejecución de la presente prenda sin desplazamiento, de conformidad al artículo mil seiscientos diez del Código Civil y a lo señalado en este instrumento, obligándose expresamente a favor de los Acreedores, a suspender el ejercicio de tales derechos y acciones hasta la fecha en que los Acreedores hayan percibido el pago íntegro y total de las Obligaciones Garantizadas. La suspensión del ejercicio de los derechos otorgados por la ley y subordinación

20

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

contenida en esta cláusula se ha acordado y establecido en beneficio de los Acreedores. – CLÁUSULA OCTAVA: ACEPTACIÓN DEL CONSTITUYENTE Y EXIGIBILIDAD ANTICIPADA Y EJECUCIÓN. Ocho.Uno. Por este acto, el Constituyente, debidamente representado en el modo indicado en la comparecencia de este instrumento, acepta y conviene en beneficio de los Acreedores, que la ocurrencia de cualesquiera de las Causales de Incumplimiento contempladas en el Contrato de Crédito y demás Documentos del Financiamiento puede producir a su respecto la exigibilidad inmediata y anticipada, y como si fueran de plazo vencido, de las Obligaciones Garantizadas, y por ende, de esta Prenda sobre Acciones, como también de los intereses y gastos a que ella diere lugar, pudiendo seguirse en contra del Constituyente todas y cada una de las acciones de cobro y/o de cualquier naturaleza derivadas de esta Prenda sobre Acciones. Ocho.Dos. Sin perjuicio de las Causales de Incumplimiento pactadas en el Contrato de Crédito o en cualquiera de los demás Documentos del Financiamiento, las Obligaciones Garantizadas se podrán hacer igualmente exigibles en caso de verificarse una cualquiera de las siguientes circunstancias: /a/ Si los Accionistas perdieren o dejaren de tener el dominio de las Acciones Prendadas, salvo que se encuentre permitido bajo los Documentos del Financiamiento; /b/ Si las Acciones Prendadas se encontraren afectas o quedaren afectas en el futuro a otros gravámenes que los autorizados en esta escritura o en los Documentos del Financiamiento, limitaciones de dominio, prohibiciones y/o embargos, sin

21

la previa autorización de los Acreedores, salvo lo establecido en los Documentos del Financiamiento; /c/ Si la prenda sin desplazamiento de primer grado y prohibición que se pacta por el presente instrumento no fuere inscrita en los registros competentes dentro del plazo de treinta Días Hábiles, contado desde la fecha de suscripción de esta escritura; o /d/ En los demás casos en que la ley, establezcan la exigibilidad anticipada. Ocho.Tres. Se deja expresa constancia que las causales de aceleración anteriormente estipuladas, se han establecido en beneficio exclusivo de los Acreedores. – CLÁUSULA NOVENA: OBLIGACIONES ADICIONALES DEL CONSTITUYENTE. Nueve.Uno. Ampliación. /a/ Para garantizar el íntegro, eficaz y oportuno cumplimiento de todas y cada una de las Obligaciones Garantizadas en virtud de la Prenda sobre Acciones de que da cuenta el presente instrumento y demás obligaciones accesorias que se devenguen de la misma, el Constituyente, debidamente representado en la forma indicada en la comparecencia, deberá constituir a favor de los Acreedores, respecto de Acciones Futuras: /i/ prenda sin desplazamiento de primer grado de conformidad a las disposiciones contenidas en la Ley de Prenda sin Desplazamiento; /ii/ prohibición de gravar, enajenar, disponer o celebrar acto o contrato alguno sin previa autorización escrita de los Acreedores, salvo por lo dispuesto en la cláusula siete punto dieciocho del Contrato de Crédito, sobre las Acciones Futuras a partir de la fecha del presente instrumento y hasta la fecha en que se produzca la total y completa extinción de las Obligaciones Garantizadas;

22

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

y /iii/ llevar a cabo y suscribir una escritura de declaración en términos sustancialmente similares al formato de declaración que como Anexo Dos se protocoliza conjuntamente al presente instrumento, bajo el mismo número de repertorio o, en el evento de ser requerido por el Registro de Prendas sin Desplazamiento, una escritura de modificación a la presente escritura, a ser suscrita conjuntamente con el Acreedor, dentro de los treinta días siguientes a que dichas Acciones Futuras hayan sido suscritas por el Constituyente. /b/ La obligación del Constituyente de constituir las prendas sobre acciones en favor de los Acreedores, se mantendrá en el tiempo hasta la fecha en que se produzca la total y completa extinción de las Obligaciones Garantizadas. Nueve.Dos. División, Fusión y Absorción. En este acto, el Constituyente, debidamente representado en la forma que se indica en la comparecencia de este instrumento, se obliga a no acordar la división o fusión de la Sociedad ni la absorción de ésta por parte de terceros, ni su transformación, salvo autorización previa y por escrito de los Acreedores y por lo permitido bajo los Documentos del Financiamiento. En todo caso, la Prenda sobre Acciones, restricciones y prohibiciones constituidas en virtud del presente Contrato se extenderán a todas las acciones de las nuevas sociedades que se formen en virtud de la división, fusión o transformación o que subsistan luego de ella, que correspondan o corresponderían a el Constituyente como propietario de las Acciones Prendadas afectas a la prenda, restricciones y prohibiciones constituidas en

23

virtud del presente Contrato y de todas aquellas nuevas acciones a las cuales esta prenda, restricciones y prohibiciones se hacen extensivas de acuerdo a lo señalado en las cláusulas anteriores. El Constituyente y la Sociedad se obligan a requerir las inscripciones y registros necesarios o convenientes para perfeccionar la prenda y prohibición sobre aquellas nuevas acciones que se emitan de acuerdo a lo indicado precedentemente. El Constituyente y la Sociedad deberán informar a los Acreedores la fecha en la cual los correspondientes títulos se encuentren disponibles para su retiro, facultando en este acto los Acreedores para retirar los títulos correspondientes en todos los casos precedentes, renunciando en consecuencia el Constituyente a retirar dichos títulos. Asimismo, el Constituyente faculta a los Acreedores para requerir la inscripción de estas prendas y prohibiciones en los correspondientes registros de accionistas. Nueve.Tres. Extinción. Por este acto el Constituyente y la Sociedad, debidamente representados en este instrumento, se obligan a que hasta la fecha en que se produzca la total y completa extinción de las Obligaciones Garantizadas o hasta la fecha en la que se produzca la enajenación de las Acciones Prendadas y el pago anticipado de parte de las Obligaciones Garantizadas conforme a lo dispuesto en el Contrato de Crédito, la totalidad de las Acciones Prendadas, incluyendo las Acciones en Garantía actualmente emitidas y las Acciones Futuras que se emitan partir de la fecha del presente instrumento, deberán estar prendadas a favor del Constituyente, para caucionar las Obligaciones

24

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

Garantizadas en conformidad a las disposiciones contenidas en la Ley de Prenda sin Desplazamiento. Nueve.Cuatro. Se deja constancia que, a menos que los Documentos del Financiamiento dispongan lo contrario, toda Obligación Garantizadas cuyo pago se haya convenido en moneda extranjera se entenderá extinguida sólo hasta por el monto por el que los Acreedores, hayan recibido dicha moneda en divisas de libre convertibilidad y disponibilidad o, si el pago se efectuare en otra moneda, sólo hasta por el monto con el que con dicha moneda pueda adquirir la moneda extranjera con la que haya debido hacérseles el pago en virtud de la convención o la ley, el Día Hábil bancario siguiente a aquél en que los Acreedores, reciba los dineros en cuestión. – Para los efectos de este instrumento, por “Día Hábil” se entenderá cualquier día en que los bancos e instituciones financieras deben mantener sus oficinas abiertas para el ejercicio de operaciones propias de su giro en Nueva York, Nueva York, Estados Unidos de América, Lima, Perú y Santiago, Chile. Lo anterior no recibirá aplicación en caso de plazos legales conforme a lo establecido en el artículo cuarenta y ocho y siguientes del Código Civil. – CLÁUSULA DÉCIMA: MANTENCIÓN DEL DOMINIO. El Constituyente: /a/ llevará a cabo, asimismo, a su costo exclusivo, todas las acciones judiciales y extrajudiciales que sean necesarias para mantener el dominio y la libre disposición de las Acciones Prendadas de su propiedad y para defenderlas de acciones de terceros; y /b/ deberá informar mediante carta certificada dirigida a los Acreedores a su

25

domicilio señalado en la comparecencia de este instrumento, todo embargo, incautación, pérdida significativa o menoscabo significativo, que haya sufrido cualquiera de las Acciones Prendadas de su propiedad, dentro de los diez Días Hábiles siguientes a que la respectiva ocurrencia haya llegado a su conocimiento. – CLÁUSULA UNDÉCIMA: ACEPTACIÓN DE LA SOCIEDAD. Once.Uno. La Sociedad, debidamente representada en la forma indicada en la comparecencia, se notifica y toma debido conocimiento de la Prenda sobre Acciones y las restricciones y prohibiciones constituidas en virtud de este instrumento y acepta, desde luego, las obligaciones y prohibiciones que este Contrato impone a la Sociedad, incluyendo, sin limitación, las disposiciones y designaciones de mandatarios contenidas en este instrumento, incluyendo su designación como mandataria de acuerdo a lo dispuesto en la sección Siete.Cinco del presente instrumento. Once.Dos. La Sociedad, debidamente representada en la forma indicada en la comparecencia, reconoce que, mientras subsista la Prenda sobre Acciones, todo nuevo título que se emita a favor del Constituyente según se establece en la Cláusula Tres.Dos letra /c/ precedente, sólo podrá ser retirado por los Acreedores, lo que no será necesario acreditar a terceros. – CLÁUSULA DUODÉCIMA: CONSTANCIA Y RECONOCIMIENTO. TÍTULO SUFICIENTE. Doce.Uno. Se deja constancia que la prenda y prohibiciones constituidas por la presente escritura, son sin perjuicio de cualquier otra garantía y prohibición que se hubiere constituido por la Sociedad,

26

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

el Constituyente, y/o terceros, sea real o personal, para caucionar las Obligaciones Garantizadas. El presente Contrato no se considerará bajo ninguna circunstancia como una modificación, sustitución o limitación de los derechos otorgados a los Acreedores, en virtud del Contrato de Crédito, los Pagarés que se suscriban de conformidad al mismo y/o los demás Documentos del Financiamiento. Doce.Dos. El Constituyente reconoce en virtud del presente instrumento las Obligaciones Garantizadas a favor de los Acreedores, que se describen en la Cláusula Primera de este instrumento. Declara además, en favor de los Acreedores, que: /a/ Esta escritura, en copia fiel y autorizada, conjuntamente con una copia simple del Contrato de Crédito o de los Pagarés según corresponda, constituye buen y suficiente título para iniciar todas las acciones que en derecho procedan en relación con las garantías que en este instrumento se constituyen. Lo dispuesto en este instrumento no se considerará bajo ninguna circunstancia como limitación de los derechos de los Acreedores en virtud de la ley, ni como una modificación, sustitución o limitación de los derechos otorgados a los Acreedores en virtud de los Documentos del Financiamiento; y /b/ En cualquier gestión de cobro de las Obligaciones Garantizadas, reconocerá este instrumento y el Contrato de Crédito, los Pagarés que se suscriban de conformidad al mismo y/o los demás Documentos del Financiamiento como títulos suficientes para ejercer las acciones que en derecho correspondan respecto de las mismas. – CLÁUSULA DÉCIMO TERCERA:

27

MANDATO. Trece.Uno. Sin perjuicio de cualquiera designación de mandatarios para recibir notificaciones judiciales que se hayan hecho o que se hagan en el futuro, adicionalmente el Constituyente y la Sociedad confieren mandato irrevocable a doña MÓNICA MARÍA MILOSLAVICH HART, [nacionalidad], [estado civil], [profesión u oficio], cédula de identidad número [●], y a don FREDY CHALCO, [nacionalidad], [estado civil], [profesión u oficio], cédula de identidad número [●], para que, actuando uno cualquiera de ellos, separada e indistintamente, pueda recibir, para y en representación del Constituyente y la Sociedad, notificaciones y requerimientos, judiciales y/o extrajudiciales, en cualquier gestión, procedimiento o juicio, relacionado con este Contrato, cualquiera que fuese el procedimiento aplicable o el tribunal o autoridad a que estuviere encomendado su conocimiento, de forma que notificado o requerido que sea el mandatario se entenderá válidamente emplazada la Sociedad o el Constituyente en dicha gestión, procedimiento o juicio. En el ejercicio de este mandato irrevocable, los mandatarios estarán facultados ampliamente para representar judicialmente a la Sociedad y a el Constituyente, lo que incluye recibir toda clase de notificaciones, contestar demandas y actuar con las facultades judiciales comprendidas en ambos incisos del Artículo séptimo del Código de Procedimiento Civil, las cuales se dan por expresamente reproducidas en su integridad. El Constituyente y la Sociedad declaran expresamente que el poder de que da cuenta esta Cláusula tiene el carácter de irrevocable, en los términos a que

28

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

se refiere el Artículo doscientos cuarenta y uno del Código de Comercio, por cuanto su ejecución interesa a los Acreedores. Trece.Dos. Presentes en este acto a doña MÓNICA MARÍA MILOSLAVICH HART y a don FREDY CHALCO, ya individualizados, exponen que aceptan el poder que se les otorga en la Sección Trece.Uno anterior, obligándose a no renunciar al mismo sin el consentimiento escrito de los Acreedores. Tres.Tres. El presente poder especial sólo podrá ser revocado siempre que, simultáneamente con su revocación y en el mismo instrumento, el Constituyente y la Sociedad designen a un nuevo mandatario judicial con las mismas facultades y en los mismos términos de esta cláusula. El nuevo mandatario judicial deberá ser una persona natural con residencia permanente en Chile y ser aprobado previamente por los Acreedores. Trece.Cuatro. Asimismo, el Constituyente y la Sociedad se obligan a mantener en todo momento dos o más apoderados con las mismas facultades y en los mismos términos de esta Cláusula en caso que el mandato irrevocable otorgado en esta cláusula terminare por fallecimiento o incapacidad de cualquiera de los apoderados. El poder otorgado por este acto por el Constituyente y la Sociedad no revoca ningún poder otorgado con anterioridad a esta fecha y, en el evento de otorgar otro poder en el futuro, no se entenderá por ese hecho revocado el poder otorgado en el presente instrumento. – CLÁUSULA DÉCIMO CUARTA: TITULARIDAD DE DERECHOS. SUCESORES Y CESIONARIOS. Catorce.Uno. La Prenda sobre Acciones y prohibiciones que se constituyen en virtud del presente instrumento beneficiarán a, y los

29

derechos que otorga podrán ser ejercidos por los Acreedores, o por quienes revistan la calidad de sucesores o cesionarios de éstas, y quienes se subroguen legal o convencionalmente en tales derechos, todo lo anterior en conformidad al Contrato de Crédito, los Pagarés y los demás Documentos del Financiamiento. Tales sucesores o cesionarios, y quienes se subroguen legal o convencionalmente en los derechos, tendrán en contra del Constituyente y la Sociedad los mismos derechos y beneficios que esta escritura otorga a los Acreedores, considerándose como tales para todos los efectos legales y contractuales a que haya lugar. Catorce.Dos. Se deja constancia que los Acreedores podrán ceder total o parcialmente sus derechos emanados de este Contrato y del Contrato de Crédito, de conformidad y con sujeción a lo establecido en dichos documentos. El Constituyente y la Sociedad no podrán ceder sus derechos y obligaciones conforme este Contrato, sin el consentimiento previo y por escrito de los Acreedores. – CLÁUSULA DÉCIMO QUINTA: ALZAMIENTO. La Sociedad podrá requerir a los Acreedores, el otorgamiento de un instrumento de alzamiento de la Prenda sobre Acciones y prohibición constituidas por este instrumento, una vez que se haya dado íntegro y total cumplimiento a todas y cada una de las Obligaciones Garantizadas. Por lo tanto una vez pagadas todas las Obligaciones Garantizadas, el Acreedor en este acto se obliga a alzar la prenda constituida por el presente instrumento dentro de los cuarenta y cinco días siguientes al íntegro y total cumplimiento de todas y cada una de las Obligaciones

30

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

Garantizadas. – CLÁUSULA DÉCIMO SEXTA: GASTOS E IMPUESTOS. Dieciséis.Uno. Los gastos, impuestos, derechos notariales y de registro, como asimismo, cualquier desembolso de cualquier naturaleza que esté relacionado con el otorgamiento o registro de este Contrato, así como aquellos derivados de escrituras públicas complementarias que pueda ser necesario otorgar en orden a clarificar, rectificar, complementar o modificar el presente instrumento, y todos aquellos correspondientes al alzamiento en su oportunidad de la Prenda sobre Acciones y prohibición de que da cuenta este Contrato, será de cargo del Constituyente. Dieciséis.Dos. El Constituyente, debidamente representado del modo indicado en la comparecencia, declara que los actos y contratos contenidos en este instrumento, como asimismo el ejercicio de los derechos que puedan derivar de los mismos, no han estado ni están sujetos a impuestos u otros cargos similares y que, en consecuencia, los Acreedores, pueden libremente ejercer tales derechos, sin restricción alguna. Los impuestos que conforme a la ley chilena puedan afectar el pago de las Obligaciones Garantizadas, así como cualquier otro impuesto, tributo, contribución, derecho, carga, retención, remuneraciones, aumentos de costos, cargos financieros, gastos reembolsables, desembolsos y cualquier otra cantidad, incluidos los honorarios y gastos en que sea necesario incurrir, eventualmente, con motivo de las acciones de cumplimiento y cobro judicial o extrajudicial a que haya lugar en relación con las Obligaciones Garantizadas que emanan para el

31

Constituyente, la Sociedad y/o terceros que hayan caucionado las Obligaciones Garantizadas, de los contratos referidos en la Cláusula Primera del presente Contrato, son de responsabilidad exclusiva del Constituyente. – CLÁUSULA DÉCIMO SÉPTIMA: FACULTAD ESPECIAL. Diecisiete.Uno. Se faculta al portador de copia autorizada del presente instrumento para notificar, llevar a cabo y requerir de la Sociedad, a través de un Notario Público, la anotación de la Prenda sobre Acciones y prohibición contenidas en este instrumento en el Registro de Accionistas de la Sociedad, y requerir las publicaciones, inscripciones, subinscripciones o cancelaciones que fueren procedentes y realizar todos aquellos actos que sean necesarios o convenientes para el perfeccionamiento de dicha Prenda sobre Acciones y prohibición, especialmente en el Registro de Prendas sin Desplazamiento, pudiendo para ello firmar todos los documentos que sean procedentes. Sin perjuicio de lo anterior, cada una de las Partes otorga mandato especial e irrevocable a los señores /i/ don Andrés Sanfuentes Astaburuaga, don Guillermo Vial Yavar, doña Catalina Silva Donoso y don Ignacio Vargas Peña; y /ii/ a don José Luis Ambrosy Eyzaguirre, don Jaime Andrés Salas Vergara y a don Roberto Ignacio Carrillo Almendras para que, actuando uno cualquiera de los cuatro primeros con uno cualquiera de los tres segundos, en nombre y representación de las Partes, puedan redactar cualquier texto necesario para corregir o complementar esta escritura pública y lograr la plena publicación, inscripción, subinscripción y anotación de

32

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

la constitución de la Prenda sobre Acciones y prohibición en los registros que legalmente corresponda. En uso de sus atribuciones, los mandatarios podrán corregir, rectificar y complementar el contenido de esta escritura, la individualización de las Partes y las Acciones Prendadas, o bien, completar los datos que sean necesarios para el perfeccionamiento de los acuerdos que las Partes han pactado, como asimismo podrán concurrir al otorgamiento de toda clase de instrumentos públicos o privados mediante los cuales se modifique el presente Contrato o modificaciones de los Documentos del Financiamiento, entre otros. Del mismo modo, los mandatarios quedan facultados para reducir a escritura pública esos textos e inscribirlos junto con este instrumento, en el Registro de Accionistas de la Sociedad y para solicitar la rectificación, dentro del plazo de diez Días Hábiles, exceptuados los días sábado, a contar de la fecha de la inscripción de esta prenda en el Registro de Prendas sin Desplazamiento, de las inscripciones que contengan omisiones o errores manifiestos, de conformidad con el artículo dieciséis del Reglamento de Prenda sin Desplazamiento. Los Acreedores, podrán ejercer dicho mandato, en lo que le competa, por medio de sus representantes o por medio de quien éstos designen para tales efectos. Diecisiete.Dos. Se faculta a los mandatarios indicados en la Sección Diecisiete.Uno precedente para que en el desempeño de su cometido puedan requerir, otorgar y firmar toda clase de solicitudes y declaraciones, solicitar inscripciones, anotaciones, cancelaciones y otorgar

33

instrumentos públicos y/o privados para el cumplimiento de los requisitos y formalidades que establezcan las leyes y reglamentos. Las Partes dejan expresa constancia que este mandato se otorga con el carácter de irrevocable y que tal irrevocabilidad se pacta tanto en interés de los mandantes como de los mandatarios. Este mandato no se extinguirá por la disolución de ninguno de los mandantes, pues está destinado, en su caso, a ejecutarse también en caso de su disolución, conforme a lo previsto en el artículo dos mil ciento sesenta y nueve del Código Civil. Diecisiete.Tres. Se faculta además al Notario ante quien se otorga el presente instrumento para que, en virtud del artículo octavo del Reglamento de Prenda sin Desplazamiento, envíe para su inscripción en el Registro de Prendas sin Desplazamiento, por medios electrónicos, una copia autorizada de cada contrato de prenda, su modificación o alzamiento, y para llenar al efecto el formulario de solicitud al que alude el artículo noveno del Reglamento de Prenda sin Desplazamiento. Diecisiete. Cuatro. El Acreedor, representado en la forma indicada en la comparecencia, designa y confiere poder a los señores José Luis Ambrosy Eyzaguirre, don Jaime Andrés Salas Vergara y don Roberto Ignacio Carrillo Almendras para que, actuando cualquiera de ellos indistinta y separadamente en representación de los Acreedores, puedan ejercer judicial o extrajudicialmente los derechos y acciones que correspondan a los Acreedores en virtud de lo expresado y estipulado en esta escritura, poder judicial que incluye las facultades del

34

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

inciso primero del artículo séptimo del Código de Procedimiento Civil, que se dan por reproducidas. Asimismo, el poder se extiende a la facultad de recibir notificaciones en representación de los Acreedores según lo dispuesto en el artículo treinta y siete de la Ley de Prenda sin Desplazamiento. El Constituyente toma conocimiento de este poder, reconoce que ha sido legalmente otorgado, que es válido y vigente, y se obliga a reconocer y aceptar su validez y eficacia cada vez que uno cualquiera de los mandatarios los invoque, judicial o extrajudicialmente. – CLÁUSULA DÉCIMO OCTAVA: DENOMINACIÓN DE LAS CLÁUSULAS. Las denominaciones asignadas por las Partes a las distintas estipulaciones de este Contrato han sido establecidas sólo para referencia y facilidad de su lectura, sin afectar el significado o alcance que la Cláusula en su integridad pueda tener distintos que dicha denominación. – CLÁUSULA DÉCIMO NOVENA: NULIDAD E INEFICACIA. La declaración de nulidad o ineficacia de cualquier estipulación contenida en este instrumento hará que dicha estipulación se tenga por no escrita o ineficaz; pero, la nulidad o ineficacia de dicha estipulación, no afectará la validez y eficacia de las restantes estipulaciones del presente instrumento. Con todo, las Partes convienen en reemplazar la disposición nula o ineficaz por otra disposición que sea válida y oponible que logre, en la medida de lo posible, los mismos o similares efectos que perseguía la disposición declarada nula o ineficaz. – CLÁUSULA VIGÉSIMA: AUSENCIA DE NOVACIÓN Y MODIFICACIÓN. Lo dispuesto en este instrumento no se considerará bajo

35

ninguna circunstancia como modificación, o limitación de los derechos y obligaciones de cada Parte en virtud de la ley, el Contrato de Crédito, los Pagarés que se suscriban de conformidad al mismo y/o los demás Documentos del Financiamiento, ni constituye bajo ningún concepto una novación de las Obligaciones Garantizadas. En consecuencia, los términos establecidos en el Contrato de Crédito, los Pagarés que se suscriban de conformidad al mismo y/o los demás Documentos del Financiamiento prevalecerán sobre lo dispuesto en este instrumento, en todo aquello en que fueran incompatibles o inconsistentes. – CLÁUSULA VIGÉSIMO PRIMERA: RENUNCIA DE DERECHOS. El hecho que el los Acreedores, no ejercitaren o demoraren el ejercicio de cualquiera de sus derechos de acuerdo con este Contrato y/o los demás Documentos del Financiamiento, no constituirá una renuncia de ellos, como tampoco el ejercicio separado o parcial de algún derecho impedirá el ejercicio de los mismos o de otros derechos. Las acciones y derechos a que aquí se hace referencia son acumulativos y no excluyen ninguna otra acción o derecho reconocido por la ley. – CLÁUSULA VIGÉSIMO SEGUNDA: DOMICILIO Y COMPETENCIA. Para todos los efectos legales de este Contrato, las Partes fijan su domicilio y se someten a la competencia de los tribunales ordinarios de justicia de la comuna de Santiago de Chile, y fijan su domicilio en la ciudad y comuna de Santiago de Chile. El presente Contrato se regirá por las leyes de la República de Chile. PERSONERÍAS. La personería de don Enzo Rodrigo Contreras Órdenes para representar a GRAÑA Y MONTERO

36

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

S.A.A. consta de del poder otorgado en Lima, Perú, con fecha diecinueve de julio de dos mil diecinueve, ante el Notario Luis Dannon Brender. La personería de don Sergio Morales Contreras para representar a ADEXUS S.A. consta de escritura pública de fecha doce de julio de dos mil diecisiete, otorgada en la Notaría de Santiago de doña Myriam Amigo Arancibia, bajo el repertorio número once mil setecientos treinta y nueve guion diecisiete. La personería de don Enzo Contreras Órdenes para representar a ADEXUS S.A. consta de escritura pública de fecha diez de junio de dos mil diecinueve, otorgada en la Notaría de Santiago de doña Myriam Amigo Arancibia, bajo el repertorio número ocho mil setecientos ochenta y ocho guion diecinueve. La personería de don Jaime Andrés Salas Vergara para representar a CS PERU INFRASTRUCTURE HOLDINGS LLC, consta de poder otorgado en el extranjero, con fecha dieciocho de julio de dos mil diecinueve, el que debidamente legalizado, fue protocolizado en la Notaría de don Patricio Raby Benavente, con fecha veintitrés de julio de dos mil diecinueve, bajo el Repertorio número siete mil veintisiete guion dos mil diecinueve. Las personerías antes indicadas no se insertan por ser conocidas de las partes y haberlas tenido a la vista el Notario que autoriza. En comprobante y previa lectura firman los comparecientes. Doy fe. –

ENZO CONTRERAS ÓRDENESPP.

PP. GRAÑA Y MONTERO S.A.A.

37

PP. ADEXUS S.A.

SERGIO MORALES CONTRERAS

PP. ADEXUS S.A.

JAIME ANDRÉS SALAS VERGARA

PP. CS PERU INFRASTRUCTURE HOLDINGS LLC

MÓNICA MARÍA MILOSLAVICH HART

FREDY CHALCO

NOTARIO

38

Exhibit H

FORM OF SECOND LIEN CHILEAN SHARE PLEDGE AGREEMENT

(Attached)

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

REPERTORIO Nº

PRENDA SIN DESPLAZAMIENTO DE SEGUNDO GRADO

SOBRE ACCIONES DE ADEXUS S.A

POR

GRAÑA Y MONTERO S.A.A.

En Santiago de Chile, a [●] de julio del año dos mil diecinueve, ante mí, PATRICIO RABY BENAVENTE, Abogado, Notario Público Titular de la Quinta Notaría de Santiago, con domicilio en Gertrudis Echenique número treinta, Oficina treinta y dos, Las Condes, Santiago, COMPARECEN: /Uno/ Don ENZO RODRIGO CONTRERAS ÓRDENES, chileno, casado, ingeniero comercial, cédula de identidad número once millones novecientos cincuenta y dos mil quinientos cincuenta y seis guion K, en representación, según se acreditará, de GRAÑA Y MONTERO S.A.A., una sociedad constituida y existente de conformidad a las leyes de la República del Perú, Rol Único Tributario número cincuenta y nueve millones ciento sesenta y cinco mil ochocientos noventa guion cinco, todos domiciliados para estos efectos en [●], en adelante también indistintamente el “Deudor”; o el “Constituyente”. /Dos/ Don SERGIO ANDRÉS MORALES CONTRERAS, chileno, casado, ingeniero civil industrial, cédula de identidad número diez millones seiscientos veintinueve mil ochocientos setenta y cinco guion cero, y don ENZO RODRIGO CONTRERAS ÓRDENES, chileno, casado, ingeniero comercial, cédula de identidad número once millones novecientos cincuenta y dos mil quinientos cincuenta y seis guion K, en representación, según se acreditará, de ADEXUS S.A., una sociedad anónima

1

constituida y existente de conformidad a las leyes de la República de Chile, Rol Único Tributario número noventa y seis millones quinientos ochenta mil sesenta guion tres, todos domiciliados para estos efectos en Miraflores trescientos ochenta y tres, piso veinte, comuna de Santiago, en adelante también la “Sociedad”/. /Tres/ don JAIME ANDRÉS SALAS VERGARA, chileno, casado, abogado, cédula de identidad número quince millones trescientos doce mil ochocientos cincuenta y dos guion nueve, en representación, según se acreditará, de CS PERU INFRASTRUCTURE HOLDINGS LLC, una sociedad constituida y existente de conformidad a las leyes de Delaware, Estados Unidos de América, todos domiciliados para estos efectos en Apoquindo tres mil setecientos veintiuno, piso catorce, Las Condes, Región Metropolitana /en adelante, el “Acreedor”, y en conjunto con el Constituyente y la Sociedad, las “Partes”/; todos los comparecientes, mayores de edad, quienes acreditan su identidad con las cédulas de identidad antes citadas y exponen que han convenido en celebrar un contrato de prenda sin desplazamiento de segundo grado sobre acciones, en adelante indistintamente denominado el “Contrato”, en los términos y condiciones que se estipulan en este instrumento: CLÁUSULA PRIMERA: ANTECEDENTES. Uno.Uno. Contrato de Crédito. Por instrumento privado de fecha [veintiséis de julio de dos mil diecinueve], el Deudor suscribió con el Acreedor un contrato de crédito en idioma inglés, regido por las leyes del Estado de Nueva York, Estados Unidos de América /en adelante, el “Contrato de Crédito”/, una

2

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

copia del cual se ha protocolizado con esta misma fecha bajo el repertorio número              en esta Notaría, y que se considera parte integrante de este instrumento. Conforme al Contrato de Crédito, el Acreedor, en su calidad de Acreedor Inicial /“Initial Lender”/, y cada una de las instituciones financieras /“Lenders”/ que adquirieran el todo o parte del Compromiso /“Commitment”/ del Acreedor /conjuntamente con el Acreedor, los “Acreedores”/, acordaron otorgar un préstamo al Deudor que, en total, no superen el monto del Compromiso /en adelante, el o los préstamos otorgados por los Acreedores se denominarán indistintamente los “Préstamos”/, según el Deudor así lo requiera por escrito y sujeto además al cumplimiento de las condiciones contenidas en el Contrato de Crédito. Conforme a la definición de dicho término en el Contrato de Crédito, el Compromiso asciende a un monto máximo de treinta y cinco millones de dólares de los Estados Unidos de América /en adelante, “Dólares”/. Uno.Dos. Conforme a lo dispuesto en la cláusula dos punto cero cuatro del Contrato de Crédito, se llevará registro del capital y los intereses de los Préstamos desembolsados en un registro que llevarán los Acreedores y que, a petición suya, deberán evidenciarse, alternativamente, en un pagaré suscrito por el Deudor ya sea bajo las leyes del Estado de Nueva York, Estados Unidos de América, o bajo las leyes de la República del Perú /en adelante, los “Pagarés”/, pudiendo ejercerse las acciones que de ellos se deriven, en la época y en la forma que tales Pagarés establezcan. Las Partes dejan

3

constancia que para ejercer las preferencias y demás derechos derivados de este contrato no será necesario acreditar frente a terceros que los Pagarés documentan obligaciones emanadas del Contrato de Crédito. Para efectos de dar cumplimiento a lo dispuesto en el artículo tercero, numeral dos, del artículo catorce de la Ley número veinte mil ciento noventa /en adelante la “Ley de Prenda sin Desplazamiento”/, el Constituyente estará obligado a suscribir una escritura de declaración, en términos sustancialmente similares al instrumento que como Anexo Uno se protocoliza conjuntamente a la presente escritura, bajo el mismo número de repertorio del presente instrumento, destinado a individualizar los Pagarés tan pronto éstos lleguen a ser suscritos por el Deudor, y en todo caso dentro de los treinta días corridos siguientes a la suscripción de los mismos. La referida escritura deberá incluir, como anexo protocolizado bajo el mismo número de repertorio de dicha escritura, una copia simple de los Pagarés que en ella se individualicen. Uno.Tres. Pago de los Préstamos. Conforme al Contrato de Crédito, el Deudor se obligó a pagar los Préstamos desembolsados en siete cuotas trimestrales y sucesivas, siendo la primera cuota pagadera al décimo octavo mes luego de la Fecha de Cierre /“Closing Date”/. Cada una de las cuotas ascenderá a un monto equivalente al catorce coma veintinueve por ciento del capital total pendiente de pago de los Préstamos desembolsados más los intereses correspondientes y será pagadera conforme a la participación de cada uno de los Acreedores en los

4

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

Préstamos. Uno.Cuatro. Intereses. A. Tasa de Interés. El Contrato de Crédito establece que el Deudor se obliga a pagar intereses desde el día del respectivo desembolso hasta el día del vencimiento del Préstamo correspondiente, a una tasa de interés anual igual a la Tasa Applicable /Applicable Rate/, aplicando en cada caso el que esté vigente de tiempo en tiempo. “Tasa Aplicable” significa: /i/ ocho coma nueve cero por ciento por el período desde e incluyendo la Fecha de Cierre hasta pero excluyendo el día correspondiente a seis meses después de la Fecha de Cierre; /ii/ nueve coma uno cinco por ciento por el período desde e incluyendo el día correspondiente a seis meses después de la Fecha de Cierre hasta pero excluyendo el día correspondiente a un año después de la Fecha de Cierre; /iii/ nueve coma cuatro cero por ciento por el período desde e incluyendo el día correspondiente a un año después de la Fecha de Cierre hasta pero excluyendo el día correspondiente a treinta meses después de la Fecha de Cierre; y /iv/ nueve coma nueve cero por ciento incluyendo el día correspondiente a treinta meses después de la Fecha de Cierre hasta pero excluyendo el día correspondiente a tres años después de la Fecha de Cierre. B. Pago de intereses. Los intereses que devenguen los Préstamos se pagarán /a/ trimestralmente, en cada Fecha de Pago Trimestral, según ésta se define más adelante; /b/ en la fecha en que se prepague o repague dicho préstamo; y /c/ en el día del vencimiento de dicho préstamo /por aceleración o por otra causa/, y se calcularán sobre el capital insoluto de cada

5

Préstamo, devengándose por períodos vencidos, en base al número de días efectivamente transcurridos, sobre la base de un año de trescientos sesenta y cinco o trescientos sesenta y cinco días, según corresponda. Sin perjuicio de lo anterior, en caso de repagar íntegramente un Préstamo en el mismo día en que se desembolsó al Deudor, dicho préstamo devengará intereses correspondientes a un día. La “Fecha de Pago Trimestral” significa cada treinta y uno de marzo, treinta de junio, treinta de septiembre y treinta y uno de diciembre de cada año. Uno.Cinco. Otras estipulaciones. El Contrato de Crédito contempla además, el pago de intereses penales sobre montos adeudados e insolutos o morosos, el pago por parte del Deudor del aumento de los costos para los Acreedores de otorgar y mantener los Préstamos; el pago de comisiones, gastos, honorarios, costas y otras sumas, y, asimismo, regula las obligaciones de hacer y de no hacer, los eventos que motivarán prepagos obligatorios y los casos de incumplimiento que, de ocurrir, sujeto a los términos y condiciones de dicho instrumento, permitirán a los Acreedores a declarar todo o parte del saldo adeudado de los Préstamos o cualquier otra obligación como de plazo vencido e inmediatamente exigibles. Dos. Con el objeto de documentar las obligaciones contraídas con los Acreedores, el Deudor celebró y celebrará una serie de contratos, y contrajo y contraerá diversas obligaciones, las cuales se encuentran documentadas en los documentos del financiamiento /“Credit Documents”/ /en adelante, los “Documentos del Financiamiento”/, entre los cuales se

6

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

incluyen sin limitación, los siguientes: /a/ el Contrato de Crédito; /b/ los Pagarés /“Notes”/; /c/ la Carta de Honorarios /“Fee letter”/; /d/ el Acuerdo de Fideicomiso del Acreedor /“Lender Trust Agreement”/; /e/ el Acuerdo de Indemnidad /“Indemnity Agreement”/; /f/ el Acuerdo de Fideicomiso de Pago /“Payment Trust Agreement”; /g/ el contrato de prenda sin desplazamiento de primer grado sobre acciones de la Sociedad en favor de los Acreedores; /h/ este Contrato; y /i/ cualesquiera otro contrato o acuerdo que sea designado por los Acreedores de tiempo en tiempo como un Documento del Financiamiento bajo el Contrato de Crédito. Cada una de las obligaciones de pago o de otra naturaleza del Deudor bajo los Documentos del Financiamiento referidas en esta cláusula y bajo cualquier otro instrumento que suscriba o acepte, o pudiere suscribir o aceptar en el futuro para documentar tales obligaciones de pago, y todas y cualesquiera obligaciones de pago que pueda adeudar o contraer en el futuro, directa o indirectamente, en favor de los Acreedores con motivo de los Documentos del Financiamiento, incluyendo capital, reajustes, intereses pactados, intereses penales, comisiones, honorarios, costas, gastos, derechos, cargos y recargos, y cualquier otra obligación en la que incurra el Deudor, de tiempo en tiempo, en relación con los Documentos del Financiamiento, se denominarán en adelante una “Obligación Garantizada” y colectivamente las “Obligaciones Garantizadas”. Tres. A menos que se disponga lo contrario, cualquier referencia en el presente contrato a cualquier persona incluirá a sus

7

sucesores y cesionarios permitidos. Todos los términos definidos en su forma singular tendrán el mismo significado cuando sean usados en su forma plural y viceversa, con excepción de los términos Acreedor y Acreedores, que tendrán el significado otorgado en este instrumento a cada uno.– CLÁUSULA SEGUNDA: SOCIEDAD Y ACCIONES. Uno/ El Deudor es dueño de trescientas treinta y cuatro mil cuatrocientas noventa y nueve acciones emitidas por la Sociedad, suscritas e íntegramente pagadas, inscritas a su nombre en el folio nueve del registro de accionistas de la Sociedad y que constan en los títulos números trece, quince, dieciséis, diecisiete y dieciocho/ en adelante, las “Acciones”/.– CLÁUSULA TERCERA: CONTRATO DE PRENDA DE PRIMER GRADO. Tres.Uno. Contrato de Prenda de Primer Grado. En virtud de escritura pública de fecha diecisiete de agosto de dos mil dieciocho, otorgada en la Notaría de Santiago de don Juan Ricardo San Martín Urrejola bajo el repertorio número cuarenta y siete mil setecientos setenta y dos guion dos mil dieciocho, el Deudor constituyó prenda mercantil sobre las Acciones Prendadas /según dicho término se define más adelante/, a favor de las sociedades Ameris Deuda Directa Fondo de Inversión y Fondo de Inversión Falcom Chilean Fixed Income /en adelante los “Acreedores de Primer Grado”/, con el objeto de garantizar el fiel, íntegro y oportuno cumplimiento por parte del Deudor de todas y cada una de las obligaciones garantizadas en virtud del contrato denominado “Acuerdo de Inversión”, celebrado mediante instrumento privado de fecha tres de agosto de dos mil

8

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

dieciocho /el “Contrato de Prenda de Primer Grado”/. Tres.Dos. En virtud de la Cláusula Tercera del Contrato de Prenda de Primer Grado, el Deudor se obligó a no gravar, enajenar, disponer, constituir garantías reales o cualquier otra carga o gravamen, prohibición o derechos en favor de persona alguna, ni impedimento o restricción alguna que pudiere afectar o embarazar el libre uso, goce, disposición de las acciones objeto del Contrato de Prenda de Primer Grado, ni celebrar acto o contrato alguno sobre todo o parte de las mismas, sin la autorización previa y por escrito de los Acreedores de Primer Grado. Tres.Tres. Por carta de fecha veintiséis de julio de dos mil diecinueve, los Acreedores de Primer Grado autorizaron al Deudor a constituir prenda sin desplazamiento de segundo grado sobre las Acciones, en favor de los Acreedores, bajo los términos y condiciones allí señalados.– CLÁUSULA CUARTA: PRENDA SIN DESPLAZAMIENTO DE PRIMER GRADO SOBRE ACCIONES. Asimismo, las partes dejan constancia que con esta misma fecha, en virtud del artículo noveno de la Ley de Prenda sin Desplazamiento y al Reglamento de Prenda sin Desplazamiento, por escritura pública otorgada en esta misma Notaría se constituyó prenda de primer grado sobre todas las acciones que se emitan por la Sociedad y que el Constituyente suscriba o adquiera por cualquier causa en el futuro, incluyendo aquellas que el Constituyente adquiera con ocasión de las Acciones Prendadas de las que es dueño, entendiéndose constituido el derecho real de prenda desde la fecha de la inscripción de dicho instrumento en el Registro de

9

Prenda sin Desplazamiento.– CLÁUSULA QUINTA: PRENDA SIN DESPLAZAMIENTO DE SEGUNDO GRADO SOBRE ACCIONES. Cinco.Uno. Prenda sin Desplazamiento de Segundo Grado. Por el presente instrumento, y con el objeto de garantizar el cumplimiento íntegro, efectivo y oportuno por parte del Deudor de todas y cada una de las Obligaciones Garantizadas, el Constituyente, debidamente representado en la forma indicada en la comparecencia, constituye a favor de los Acreedores prenda sin desplazamiento de segundo grado sobre treinta y siete mil novecientas veintinueve acciones, que corresponden aproximadamente al once coma tres tres nueve por ciento de las acciones de la Sociedad, y que constan en el título diecisiete / las “Acciones Prendadas”/, de conformidad a la normativa contenida en el artículo catorce de la Ley veinte mil ciento noventa /en adelante, la “Ley de Prenda sin Desplazamiento”/, al Reglamento del Registro de Prendas sin Desplazamiento, contenido en el Decreto Supremo número setecientos veintidós, de fecha ocho de septiembre de dos mil diez, emitido conjuntamente por el Ministerio de Justicia y el Ministerio de Hacienda, publicado en el Diario Oficial del día veintitrés de octubre de dos mil diez /en adelante, el “Reglamento de Prenda sin Desplazamiento”/, y a los términos y condiciones contenidos en el presente instrumento. En adelante, la prenda sin desplazamiento de segundo grado que se constituye en esta cláusula quinta se denominará la “Prenda sobre Acciones”. Cinco.Dos. Extensión de la Prenda sobre Acciones. /a/ La Prenda sobre Acciones que

10

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

se constituye por el presente Contrato se extiende y garantiza a los intereses, incluso penales, a las comisiones, honorarios y a las demás obligaciones accesorias a las Obligaciones Garantizadas a favor de los Acreedores, lo que incluye, sin que la enunciación que sigue implique limitación, obligaciones por concepto de costas, gastos, honorarios, indemnización de perjuicios, contribuciones, derechos, cargas, retenciones, remuneraciones, aumentos de costos, cargos financieros, gastos reembolsables, desembolsos y por cualquier otro concepto, así como cualquier otra obligación contraída por el Deudor que hayan caucionado las Obligaciones Garantizada, en favor de los Acreedores; y garantizan también las prórrogas, renovaciones y modificaciones que puedan ser acordadas con respecto a las obligaciones que en este acto se garantizan, y en general, el íntegro y oportuno cumplimiento de todas las obligaciones derivadas de las Obligaciones Garantizadas por el ministerio de la ley; ya sea que dichas obligaciones sean de la esencia, de la naturaleza o meramente accidentales de los actos y contratos de que emanen; y sea que su cumplimiento sea exigible en las épocas convenidas o anticipadamente, en el evento de su aceleración. Garantizan, asimismo, el reembolso de las costas y gastos de cobranza, judiciales o extrajudiciales, incluidos honorarios de abogados, si existieren, en que los Acreedores, incurran con ocasión de gestiones o demandas de cobro o ejecución de la Prenda sobre Acciones. /b/ La Prenda sobre Acciones se extiende, además, a toda obligación que conste en

11

instrumentos que pueda otorgar o aceptar el Constituyente que haya caucionado las Obligaciones Garantizadas, en el futuro, en sustitución o reemplazo, o bien, en forma adicional, a aquellos que hayan sido suscritos y entregados a los Acreedores, en virtud del Contrato de Crédito, los Pagarés que se suscriban al efecto, incluidas sus eventuales hojas de prolongación y/o cualquier otro Documento del Financiamiento, como asimismo en virtud de cualquier otro documento que en el futuro pudiere complementar dichos documentos. /c/ La Prenda sobre Acciones, restricciones y prohibiciones constituidas en virtud del presente Contrato incluye y se extiende a todos los aumentos de valor de las Acciones Prendadas y a cada uno de los derechos patrimoniales que confieran a sus titulares y comprenden desde luego todos los frutos y beneficios que ellas puedan generar o producir, incluyendo, sin que la enunciación que sigue implique limitación, dividendos y ganancias, acciones liberadas de pago, derechos preferentes u opciones de cualquier naturaleza, ya sean de suscripción preferente de acciones, de bonos convertibles en acciones o de cualesquiera otros valores que confieran derechos futuros sobre la Sociedad. Por el presente acto, el Constituyente faculta en forma irrevocable a los Acreedores, por cuenta de quienes acepta su mandatario individualizado en la comparecencia, para que requiera de la Sociedad y retire y reciba de ésta los nuevos títulos de acciones u otros valores que puedan emitirse como consecuencia de una emisión de acciones liberadas de pago o de canje de acciones por la emisión de nuevos

12

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

títulos de acciones con valor nominal, quedando inhibido el Constituyente de dicha gestión y prohibido a la Sociedad entregarlos a otra persona que no sean los Acreedores, debiendo además, la Sociedad, inscribir la prenda y prohibición de estos nuevos títulos en el Registro de Accionistas a sola petición de los Acreedores con sujeción al Contrato de Crédito, lo que no será necesario acreditar ante terceros, o de Notario Público. Cinco.Tres. Las Partes declaran que el monto de las Obligaciones Garantizadas en favor de los Acreedores por esta escritura, asciende a la suma de treinta y cinco millones de Dólares, que incluye el monto adeudado por concepto de capital e intereses bajo el Contrato de Crédito y Pagarés. Cinco.Cuatro. Asimismo, y en cuanto sea necesario en derecho confirmarlo en el presente Contrato, en caso de expropiación de las Acciones Prendadas, la Prenda sobre Acciones y prohibiciones constituidas en virtud del presente instrumento se extenderán al derecho del Deudor de recibir indemnización por causa de dicha expropiación; indemnización que subrogará a las Acciones Prendadas para todos los efectos legales y contractuales a que haya lugar. Cinco.Cinco. Por el presente acto, los Acreedores aceptan la Prenda sobre Acciones de que da cuenta esta escritura y adquiere el respectivo derecho real de prenda.– CLÁUSULA SEXTA: DECLARACIONES DEL CONSTITUYENTE. El Constituyente, debidamente representado de la manera indicada en la comparecencia de este instrumento, declara en beneficio de los Acreedores que: /Uno/ Sin perjuicio de lo establecido

13

en el Contrato de Prenda de Primer Grado, se encuentra debidamente facultados para hacer las declaraciones que esta escritura contiene y para otorgar el presente Contrato, y que esta escritura ha sido debidamente suscrita por el Constituyente y que de ella emanan obligaciones legales, válidas y exigibles para este; /Dos/ Las Acciones Prendadas son de exclusivo dominio del Constituyente, estando debidamente inscritas a su nombre en el Registro de Accionistas de la Sociedad y encontrándose todas ellas debida y completamente suscritas y pagadas; y que, salvo por la prenda y prohibiciones constituidas por /i/ el presente instrumento, /ii/ el Contrato de Prenda de Primer Grado/, y /iii/ lo permitido bajo los Documentos del Financiamiento; no están afectas a gravámenes, cargas, litigios, prohibiciones de gravar y enajenar u otras restricciones, embargos, medidas prejudiciales o precautorias, acciones resolutorias y derechos preferentes de terceros, y que no están sujetas a otros impedimentos que afecten su libre disposición o la constitución y perfeccionamiento de la Prenda sobre Acciones y prohibiciones de que da cuenta el presente instrumento y que no tienen restricciones legales de naturaleza alguna que le impidan celebrar el presente instrumento; y que no se encuentran afectas a opciones, promesas de venta, ventas condicionales o a plazo ni a ningún otro acto o contrato que tienda o que tenga por objeto transferir el dominio de las Acciones Prendadas o darlas en garantía de otras obligaciones, y que no existe impedimento alguno que pueda afectar su libre

14

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

disposición o la constitución de esta Prenda sobre Acciones y prohibiciones; /Tres/ La celebración, cumplimiento y ejecución de esta Prenda sobre Acciones no vulnera ningún contrato ni acuerdo celebrado entre el Constituyente y los demás accionistas de la Sociedad, ni ninguna ley, reglamento, juicio, orden o decreto obligatorio, reglamento o norma reglamentaria o administrativa para aquél, ni provoca ningún incumplimiento de, ni constituye ninguna falta a los estatutos societarios del Constituyente o cualquier contrato, hipoteca, garantía, préstamo u otro convenio o instrumento del cual el Constituyente sea parte o del cual emanen obligaciones para éste o que limiten la disposición de sus bienes; y que no se requiere de ninguna autorización, aprobación o notificación gubernamental ni de terceros para su celebración, pleno cumplimiento y ejecución, salvo por la inscripción de este contrato en el Registro de Prenda sin Desplazamiento; y /Cuatro/ Las Acciones Prendadas representan a esta fecha el once coma tres tres nueve por ciento de las acciones emitidas, suscritas y con derecho a voto de la Sociedad, que le confieren como titular y dueño el derecho a percibir las utilidades y cualquier otro beneficio económico a ser distribuido por la Sociedad a sus accionistas, como también al ejercicio de los derechos de voto correspondientes.– CLÁUSULA SÉPTIMA: PROHIBICIÓN DE GRAVAR Y ENAJENAR. El Constituyente, por este acto y debidamente representado de la manera indicada en la comparecencia de este instrumento, se obliga, a favor de los Acreedores, a no

15

gravar, enajenar, disponer o celebrar acto o contrato alguno, respecto de todo o parte de las Acciones Prendadas, sin la autorización previa y escrita de los Acreedores, salvo por lo dispuesto en la cláusula siete punto dieciocho del Contrato de Crédito y el Contrato de Fideicomiso, según éste se define más adelante. Las Partes comparecientes declaran que por “gravar” se entenderá la constitución de cualquier caución o garantía real o cualquier carga, gravamen, prohibición, derecho en favor de terceros, embargo, impedimento o restricción que pudiere afectar o embarazar el libre uso, goce o disposición de las Acciones Prendadas en la Sociedad.– CLÁUSULA OCTAVA: ENTREGA, INSCRIPCIÓN Y NOTIFICACIÓN EN EL REGISTRO DE ACCIONISTAS. Ocho.Uno. El Constituyente hace entrega en este acto al Acreedor, de un certificado emitido por la Sociedad donde consta la propiedad sobre las Acciones Prendadas, declarando el Acreedor haberlo recibido a su entera satisfacción. Ocho.Dos. La Prenda sobre Acciones y prohibición que por este instrumento se constituye deberán ser registrada, a costa de la Sociedad, en todos los registros que correspondan de acuerdo a la naturaleza de las Acciones Prendadas que se prendan por el presente instrumento y, en especial, en el Registro de Prendas sin Desplazamiento, de acuerdo a lo establecido en el artículo veinticuatro de la Ley de Prenda sin Desplazamiento. Ocho.Tres. La Prenda sobre Acciones y prohibición contenidas en el presente instrumento serán notificadas, registradas e inscritas en el Registro de Accionistas de la Sociedad, por un Notario Público,

16

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

conforme al Artículo veintitrés de la Ley número dieciocho mil cuarenta y seis, sobre sociedades anónimas, inmediatamente otorgada esta Prenda sobre Acciones y prohibición.– CLÁUSULA NOVENA: DERECHOS, BENEFICIOS Y PRIVILEGIOS DE LOS ACREEDORES. Nueve.Uno. Derechos del Constituyente en ausencia de una causal de incumplimiento. /a/ Sin perjuicio de lo dispuesto en la sección Nueve.Cinco siguiente, en tanto no ocurra una Causal de Incumplimiento /“Event of Default”/ conforme al Contrato de Crédito o cualquiera de los Documentos del Financiamiento, el Constituyente conservará el pleno ejercicio de los derechos que como legítimo titular de las Acciones Prendadas le corresponde, incluidos el ejercicio del derecho a participar en las juntas de accionistas con derecho a voz y a voto, el derecho de cobrar y percibir dividendos en dinero de la Sociedad y el ejercicio de aquellos otros derechos que pudiere corresponderle, incluidos todos los derechos patrimoniales. /b/ Sin que implique limitación de lo anterior, el ejercicio de los derechos que correspondan a el Constituyente como legítimo titular de las Acciones Prendadas se efectuará de una manera consistente con lo establecido en el Contrato de Crédito. /c/ El Constituyente, en toda reforma a los estatutos de la Sociedad que se someta a su consideración en la junta de accionistas que se convoque al efecto, o en cualquier otra materia que se someta a su consideración y, en ambos escenarios, que pueda alterar los gravámenes, restricciones y prohibiciones constituidos en virtud de este instrumento o una cualquiera de sus disposiciones,

17

podrá votar aprobándolas siempre y cuando haya obtenido la autorización previa y por escrito de los Acreedores actuando con sujeción al Contrato de Crédito, lo que no será necesario acreditar ante terceros, para lo cual el Constituyente deberá comunicarle por escrito la fecha de celebración de la respectiva junta general de accionistas, las materias a tratar en ella y la posición que estime aconsejable asumir, con a lo menos diez Días Hábiles de anticipación. Además, y sin perjuicio de lo expresado, será siempre necesaria la autorización previa y por escrito de los Acreedores en la forma antes indicada, para ejercer el derecho a retiro establecido en la Ley número dieciocho mil cuarenta y seis, sobre sociedades anónimas. Nueve.Dos. Derechos del Constituyente si ocurre una causal de incumplimiento. /a/ En caso que ocurra una Causal de Incumplimiento conforme al Contrato de Crédito o de los demás Documentos del Financiamiento o que de cualquier forma no se dé cumplimiento íntegro, efectivo y oportuno a todas y cada una de las Obligaciones Garantizadas por la Prenda sobre Acciones de que da cuenta el presente instrumento, los Acreedores actuando de conformidad a los dispuesto en el Contrato de Crédito, lo que no será necesario acreditar ante terceros, previa comunicación escrita a el Constituyente y la Sociedad de haberse verificado alguna de tales circunstancias y a contar de la fecha de dicha notificación, con el sólo mérito de la misma y sin que deba acreditar a el Constituyente y la Sociedad el incumplimiento de que se trate, pasará a ejercer /pero no estará obligado a ejercer/ todos los

18

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

derechos que legalmente tendría el Constituyente como legítimo titular de las Acciones Prendadas. En este caso, el Constituyente deberá abstenerse de ejercer tales derechos, así como cualquier otro que les hubiese correspondido en razón de su participación accionaria en la Sociedad, todos los cuales pasarán de pleno derecho a ser ejercidos única y exclusivamente por los Acreedores. De la misma manera, el Constituyente prohíbe a la Sociedad pagar todo o parte de los dividendos que consistan en dividendos en dinero y demás beneficios a que se refiere esta cláusula, a los que se extiende automáticamente esta Prenda sobre Acciones conforme a lo señalado en el presente instrumento, en otras manos diversas de los Acreedores, a contar de la fecha en que se le practique la notificación a que se refiere la presente letra /a/, según lo dispuesto por el artículo dos mil trescientos ochenta y nueve del Código Civil. /b/ Para estos efectos, el Constituyente faculta en forma irrevocable a los Acreedores y sus sucesores y cesionarios, para que en los casos a que se refiere la letra /a/ precedente, ejerza el derecho a voz y voto que corresponde a las Acciones Prendadas /incluyendo el derecho a elegir directores de la Sociedad/ y cobre y perciba los dividendos y ganancias y demás beneficios a los cuales se extiende automáticamente esta prenda /incluyendo devoluciones de capital/. Los beneficios que así sean percibidos por los Acreedores deberán ser aplicados por éste al pago de las Obligaciones Garantizadas en conformidad con los Documentos del Financiamiento. /c/ El Constituyente declara que el

19

poder de que da cuenta esta Sección Nueve.Dos tiene el carácter de irrevocable, en los términos a que se refiere el Artículo doscientos cuarenta y uno del Código de Comercio, por cuanto su ejecución interesa a los Acreedores. Nueve.Tres. Los Acreedores, a contar de la fecha en que practique la notificación a que se refiere la Sección Nueve.Dos /a/ anterior y en virtud del presente instrumento, prohíbe a la Sociedad pagar en otras manos diversas de los Acreedores, todo o parte de los dividendos que consistan en dividendos en dinero y demás beneficios a los que se extiende automáticamente esta prenda conforme a lo señalado en el presente instrumento. Nueve.Cuatro. Los Acreedores, gozarán respecto del Constituyente y de terceros, de los beneficios, privilegios y preferencias que otorga la ley a los acreedores prendarios, sin perjuicio de los demás derechos y compensaciones establecidos en favor de los Acreedores bajo los Documentos del Financiamiento. Nueve Cinco. Sin perjuicio de lo indicado en las secciones Nueve.Uno, Nueve.Dos y Nueve.Tres anteriores, en virtud de lo dispuesto en el Contrato de Fideicomiso de fecha [●], celebrado en la ciudad de Lima, y sujeto a ley de la República del Perú entre el Constituyente, La Fiduciaria S.A., el Acreedor y Daniel René Urbina Pérez, en sus calidades de fideicomitente, fiduciario, fideicomisario y depositario, respectivamente /en adelante, el “Contrato de Fideicomiso”/, por el presente acto y a partir de esta fecha el Constituyente viene en conferir mandato irrevocable a la Sociedad para que pague a La Fiduciaria S.A. todos los dividendos

20

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

declarados, utilidades, devoluciones de capital y demás beneficios a los que se extiende automáticamente esta Prenda sobre Acciones conforme al presente instrumento y que le correspondieren al Constituyente en su calidad de accionista de la Sociedad. Las sumas que se paguen a La Fiduciaria S.A. bajo el mandato conferido en esta sección se depositarán en la cuenta que para tales efectos indique la Fiduciaria S.A. a la Sociedad. La Sociedad, por medio de su representante, acepta el mandato irrevocable que se otorga en esta cláusula y se obliga a no renunciar al mismo sin el consentimiento escrito del Acreedor en cuyo beneficio ha sido otorgado. Lo dispuesto en esta sección primará sobre lo dispuesto en la sección Nueve.Uno anterior, mientras esté vigente o no se haya puesto término anticipado al Contrato de Fideicomiso, circunstancia que no tendrá que ser acreditada ante terceros. Nueve.Seis. En caso de que la prenda constituida en virtud de este instrumento sea ejecutada judicialmente por los Acreedores, el Constituyente se obliga por este acto a suspender el ejercicio de los derechos o acciones que le corresponda en contra de la Sociedad en virtud de la subrogación legal en los derechos de los acreedores prendarios para recibir pagos o repartos de activos de la Sociedad que se relacionen con la ejecución de la presente prenda sin desplazamiento, de conformidad al artículo mil seiscientos diez del Código Civil y a lo señalado en este instrumento, obligándose expresamente a favor de los Acreedores, a suspender el ejercicio de tales derechos y acciones hasta la fecha en que los Acreedores

21

hayan percibido el pago íntegro y total de las Obligaciones Garantizadas. La suspensión del ejercicio de los derechos otorgados por la ley y subordinación contenida en esta cláusula se ha acordado y establecido en beneficio de los Acreedores. – CLÁUSULA DÉCIMA: ACEPTACIÓN DEL CONSTITUYENTE Y EXIGIBILIDAD ANTICIPADA Y EJECUCIÓN. Diez.Uno. Por este acto, el Constituyente, debidamente representado en el modo indicado en la comparecencia de este instrumento, acepta y conviene en beneficio de los Acreedores, que la ocurrencia de cualesquiera de las Causales de Incumplimiento contempladas en el Contrato de Crédito y demás Documentos del Financiamiento puede producir a su respecto la exigibilidad inmediata y anticipada, y como si fueran de plazo vencido, de las Obligaciones Garantizadas, y por ende, de esta Prenda sobre Acciones, como también de los intereses y gastos a que ella diere lugar, pudiendo seguirse en contra del Constituyente todas y cada una de las acciones de cobro y/o de cualquier naturaleza derivadas de esta Prenda sobre Acciones. Diez.Dos. Sin perjuicio de las Causales de Incumplimiento pactadas en el Contrato de Crédito o en cualquiera de los demás Documentos del Financiamiento, las Obligaciones Garantizadas se podrán hacer igualmente exigibles en caso de verificarse una cualquiera de las siguientes circunstancias: /a/ Si los Accionistas perdieren o dejaren de tener el dominio de las Acciones Prendadas, salvo que se encuentre permitido bajo los Documentos del Financiamiento; /b/ Si las Acciones Prendadas se encontraren afectas o quedaren afectas en

22

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

el futuro a otros gravámenes que los autorizados en esta escritura o en los Documentos del Financiamiento, limitaciones de dominio, prohibiciones y/o embargos, sin la previa autorización de los Acreedores, salvo lo establecido en los Documentos del Financiamiento; /c/ Si la prenda sin desplazamiento de segundo grado y prohibición que se pacta por el presente instrumento no fuere inscrita en los registros competentes dentro del plazo de treinta Días Hábiles, contado desde la fecha de suscripción de esta escritura; o /d/ En los demás casos en que la ley, establezcan la exigibilidad anticipada. Diez.Tres. Se deja expresa constancia que las causales de aceleración anteriormente estipuladas, se han establecido en beneficio exclusivo de los Acreedores. – CLÁUSULA UNDÉCIMA: OBLIGACIONES ADICIONALES DEL CONSTITUYENTE. Once.Uno. Ampliación. En un plazo máximo de tres Días Hábiles contados desde el alzamiento del Contrato de Prenda de Primer Grado de conformidad con la sección 7.20(c) del Contrato de Crédito, el Constituyente se obliga a suscribir una escritura de declaración en la cual dé cuenta de dicho pago y alzamiento y declare en términos satisfactorios para el Acreedor que la Prenda sobre Acciones ha pasado a ser de primer grado, obligándose desde ya a practicar todos los actos o contratos, actuaciones, diligencias, inscripciones, solicitudes, notificaciones, anotaciones y cualquier otra acción que sea o se estime necesaria o conveniente para dichos efectos. Once.Dos. División, Fusión y Absorción. En este acto, el Constituyente, debidamente representado en la forma que

23

se indica en la comparecencia de este instrumento, se obliga a no acordar la división o fusión de la Sociedad ni la absorción de ésta por parte de terceros, ni su transformación, salvo autorización previa y por escrito de los Acreedores y por lo permitido bajo los Documentos del Financiamiento. En todo caso, la Prenda sobre Acciones, restricciones y prohibiciones constituidas en virtud del presente Contrato se extenderán a todas las acciones de las nuevas sociedades que se formen en virtud de la división, fusión o transformación o que subsistan luego de ella, que correspondan o corresponderían a el Constituyente como propietario de las Acciones Prendadas afectas a la prenda, restricciones y prohibiciones constituidas en virtud del presente Contrato y de todas aquellas nuevas acciones a las cuales esta prenda, restricciones y prohibiciones se hacen extensivas de acuerdo a lo señalado en las cláusulas anteriores. El Constituyente y la Sociedad se obligan a requerir las inscripciones y registros necesarios o convenientes para perfeccionar la prenda y prohibición sobre aquellas nuevas acciones que se emitan de acuerdo a lo indicado precedentemente. El Constituyente y la Sociedad deberán informar a los Acreedores la fecha en la cual los correspondientes títulos se encuentren disponibles para su retiro, facultando en este acto los Acreedores para retirar los títulos correspondientes en todos los casos precedentes, renunciando en consecuencia el Constituyente a retirar dichos títulos. Asimismo, el Constituyente faculta a los Acreedores para requerir la

24

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

inscripción de estas prendas y prohibiciones en los correspondientes registros de accionistas. Once.Tres. Extinción. Por este acto el Constituyente y la Sociedad, debidamente representados en este instrumento, se obligan a que hasta la fecha en que se produzca la total y completa extinción de las Obligaciones Garantizadas o hasta la fecha en la que se produzca la enajenación de las Acciones Prendadas y el pago anticipado de parte de las Obligaciones Garantizadas conforme a lo dispuesto en el Contrato de Crédito, la totalidad de las Acciones Prendadas, deberán estar prendadas a favor del Constituyente, para caucionar las Obligaciones Garantizadas en conformidad a las disposiciones contenidas en la Ley de Prenda sin Desplazamiento. Once.Cuatro. Se deja constancia que, a menos que los Documentos del Financiamiento dispongan lo contrario, toda Obligación Garantizadas cuyo pago se haya convenido en moneda extranjera se entenderá extinguida sólo hasta por el monto por el que los Acreedores, hayan recibido dicha moneda en divisas de libre convertibilidad y disponibilidad o, si el pago se efectuare en otra moneda, sólo hasta por el monto con el que con dicha moneda pueda adquirir la moneda extranjera con la que haya debido hacérseles el pago en virtud de la convención o la ley, el Día Hábil bancario siguiente a aquél en que los Acreedores, reciba los dineros en cuestión.- Para los efectos de este instrumento, por “Día Hábil” se entenderá cualquier día en que los bancos e instituciones financieras deben mantener sus oficinas abiertas para el ejercicio de

25

operaciones propias de su giro en Nueva York, Nueva York, Estados Unidos de América, Lima, Perú y Santiago, Chile. Lo anterior no recibirá aplicación en caso de plazos legales conforme a lo establecido en el artículo cuarenta y ocho y siguientes del Código Civil. – CLÁUSULA DUODÉCIMA: MANTENCIÓN DEL DOMINIO. El Constituyente: /a/ llevará a cabo, asimismo, a su costo exclusivo, todas las acciones judiciales y extrajudiciales que sean necesarias para mantener el dominio y la libre disposición de las Acciones Prendadas de su propiedad y para defenderlas de acciones de terceros; y /b/ deberá informar mediante carta certificada dirigida a los Acreedores a su domicilio señalado en la comparecencia de este instrumento, todo embargo, incautación, pérdida significativa o menoscabo significativo, que haya sufrido cualquiera de las Acciones Prendadas de su propiedad, dentro de los diez Días Hábiles siguientes a que la respectiva ocurrencia haya llegado a su conocimiento. – CLÁUSULA DÉCIMA TERCERA: ACEPTACIÓN DE LA SOCIEDAD. Trece.Uno. La Sociedad, debidamente representada en la forma indicada en la comparecencia, se notifica y toma debido conocimiento de la Prenda sobre Acciones y las restricciones y prohibiciones constituidas en virtud de este instrumento y acepta, desde luego, las obligaciones y prohibiciones que este Contrato impone a la Sociedad, incluyendo, sin limitación, las disposiciones y designaciones de mandatarios contenidas en este instrumento, incluyendo su designación como mandataria de acuerdo a lo

26

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

dispuesto en la sección Nueve.Cinco del presente instrumento. Trece.Dos. La Sociedad, debidamente representada en la forma indicada en la comparecencia, reconoce que, mientras subsista la Prenda sobre Acciones, todo nuevo título que se emita a favor del Constituyente según se establece en la Cláusula Cinco.Dos letra /c/ precedente, sólo podrá ser retirado por los Acreedores, lo que no será necesario acreditar a terceros. – CLÁUSULA DÉCIMA CUARTA: CONSTANCIA Y RECONOCIMIENTO. TÍTULO SUFICIENTE. Catorce.Uno. Se deja constancia que la prenda y prohibiciones constituidas por la presente escritura, son sin perjuicio de cualquier otra garantía y prohibición que se hubiere constituido por la Sociedad, el Constituyente, y/o terceros, sea real o personal, para caucionar las Obligaciones Garantizadas. El presente Contrato no se considerará bajo ninguna circunstancia como una modificación, sustitución o limitación de los derechos otorgados a los Acreedores, en virtud del Contrato de Crédito, los Pagarés que se suscriban de conformidad al mismo y/o los demás Documentos del Financiamiento. Catorce.Dos. El Constituyente reconoce en virtud del presente instrumento las Obligaciones Garantizadas a favor de los Acreedores, que se describen en la Cláusula Primera de este instrumento. Declara además, en favor de los Acreedores, que: /a/ Esta escritura, en copia fiel y autorizada, conjuntamente con una copia simple del Contrato de Crédito o de los Pagarés según corresponda, constituye buen y suficiente título para iniciar todas las acciones que en derecho procedan en

27

relación con las garantías que en este instrumento se constituyen. Lo dispuesto en este instrumento no se considerará bajo ninguna circunstancia como limitación de los derechos de los Acreedores en virtud de la ley, ni como una modificación, sustitución o limitación de los derechos otorgados a los Acreedores en virtud de los Documentos del Financiamiento; y /b/ En cualquier gestión de cobro de las Obligaciones Garantizadas, reconocerá este instrumento y el Contrato de Crédito, los Pagarés que se suscriban de conformidad al mismo y/o los demás Documentos del Financiamiento como títulos suficientes para ejercer las acciones que en derecho correspondan respecto de las mismas. – CLÁUSULA DÉCIMO QUINTA: MANDATO. Quince.Uno. Sin perjuicio de cualquiera designación de mandatarios para recibir notificaciones judiciales que se hayan hecho o que se hagan en el futuro, adicionalmente el Constituyente y la Sociedad confieren mandato irrevocable a doña MÓNICA MARÍA MILOSLAVICH HART, [nacionalidad], [estado civil], [profesión y oficio], cédula de identidad número [●], domiciliada en [●], y a don FREDY CHALCO, [nacionalidad], [estado civil], [profesión y oficio], cédula de identidad número [●], domiciliado en [●], para que, actuando uno cualquiera de ellos, separada e indistintamente, pueda recibir, para y en representación del Constituyente y la Sociedad, notificaciones y requerimientos, judiciales y/o extrajudiciales, en cualquier gestión, procedimiento o juicio, relacionado con este Contrato, cualquiera que fuese el procedimiento aplicable o el tribunal o

28

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

autoridad a que estuviere encomendado su conocimiento, de forma que notificado o requerido que sea el mandatario se entenderá válidamente emplazada la Sociedad o el Constituyente en dicha gestión, procedimiento o juicio. En el ejercicio de este mandato irrevocable, los mandatarios estarán facultados ampliamente para representar judicialmente a la Sociedad y a el Constituyente, lo que incluye recibir toda clase de notificaciones, contestar demandas y actuar con las facultades judiciales comprendidas en ambos incisos del Artículo séptimo del Código de Procedimiento Civil, las cuales se dan por expresamente reproducidas en su integridad. El Constituyente y la Sociedad declaran expresamente que el poder de que da cuenta esta Cláusula tiene el carácter de irrevocable, en los términos a que se refiere el Artículo doscientos cuarenta y uno del Código de Comercio, por cuanto su ejecución interesa a los Acreedores. Quince.Dos. Presentes en este acto a doña MÓNICA MARÍA MILOSLAVICH HART y a don FREDY CHALCO, ya individualizados, exponen que aceptan el poder que se les otorga en la Sección Quince.Uno anterior, obligándose a no renunciar al mismo sin el consentimiento escrito de los Acreedores. Quince.Tres. El presente poder especial sólo podrá ser revocado siempre que, simultáneamente con su revocación y en el mismo instrumento, el Constituyente y la Sociedad designen a un nuevo mandatario judicial con las mismas facultades y en los mismos términos de esta cláusula. El nuevo mandatario judicial deberá ser una persona natural con residencia permanente en Chile y

29

ser aprobado previamente por los Acreedores. Quince.Cuatro. Asimismo, el Constituyente y la Sociedad se obligan a mantener en todo momento dos o más apoderados con las mismas facultades y en los mismos términos de esta Cláusula en caso que el mandato irrevocable otorgado en esta cláusula terminare por fallecimiento o incapacidad de cualquiera de los apoderados. El poder otorgado por este acto por el Constituyente y la Sociedad no revoca ningún poder otorgado con anterioridad a esta fecha y, en el evento de otorgar otro poder en el futuro, no se entenderá por ese hecho revocado el poder otorgado en el presente instrumento. – CLÁUSULA DÉCIMO SEXTA: TITULARIDAD DE DERECHOS. SUCESORES Y CESIONARIOS. Dieciséis.Uno. La Prenda sobre Acciones y prohibiciones que se constituyen en virtud del presente instrumento beneficiarán a, y los derechos que otorga podrán ser ejercidos por los Acreedores, o por quienes revistan la calidad de sucesores o cesionarios de éstas, y quienes se subroguen legal o convencionalmente en tales derechos, todo lo anterior en conformidad al Contrato de Crédito, los Pagarés y los demás Documentos del Financiamiento. Tales sucesores o cesionarios, y quienes se subroguen legal o convencionalmente en los derechos, tendrán en contra del Constituyente y la Sociedad los mismos derechos y beneficios que esta escritura otorga a los Acreedores, considerándose como tales para todos los efectos legales y contractuales a que haya lugar. Dieciséis.Dos. Se deja constancia que los Acreedores podrán ceder total o parcialmente sus

30

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

derechos emanados de este Contrato y del Contrato de Crédito, de conformidad y con sujeción a lo establecido en dichos documentos. El Constituyente y la Sociedad no podrán ceder sus derechos y obligaciones conforme este Contrato, sin el consentimiento previo y por escrito de los Acreedores. – CLÁUSULA DÉCIMO SÉPTIMA: ALZAMIENTO. La Sociedad podrá requerir a los Acreedores, el otorgamiento de un instrumento de alzamiento de la Prenda sobre Acciones y prohibición constituidas por este instrumento, una vez que se haya dado íntegro y total cumplimiento a todas y cada una de las Obligaciones Garantizadas. Por lo tanto una vez pagadas todas las Obligaciones Garantizadas, el Acreedor en este acto se obliga a alzar la prenda constituida por el presente instrumento dentro de los cuarenta y cinco días siguientes al íntegro y total cumplimiento de todas y cada una de las Obligaciones Garantizadas. – CLÁUSULA DÉCIMO OCTAVA: GASTOS E IMPUESTOS. Dieciocho.Uno. Los gastos, impuestos, derechos notariales y de registro, como asimismo, cualquier desembolso de cualquier naturaleza que esté relacionado con el otorgamiento o registro de este Contrato, así como aquellos derivados de escrituras públicas complementarias que pueda ser necesario otorgar en orden a clarificar, rectificar, complementar o modificar el presente instrumento, y todos aquellos correspondientes al alzamiento en su oportunidad de la Prenda sobre Acciones y prohibición de que da cuenta este Contrato, será de cargo del Constituyente. Dieciocho.Dos. El Constituyente, debidamente

31

representado del modo indicado en la comparecencia, declara que los actos y contratos contenidos en este instrumento, como asimismo el ejercicio de los derechos que puedan derivar de los mismos, no han estado ni están sujetos a impuestos u otros cargos similares y que, en consecuencia, los Acreedores, pueden libremente ejercer tales derechos, sin restricción alguna. Los impuestos que conforme a la ley chilena puedan afectar el pago de las Obligaciones Garantizadas, así como cualquier otro impuesto, tributo, contribución, derecho, carga, retención, remuneraciones, aumentos de costos, cargos financieros, gastos reembolsables, desembolsos y cualquier otra cantidad, incluidos los honorarios y gastos en que sea necesario incurrir, eventualmente, con motivo de las acciones de cumplimiento y cobro judicial o extrajudicial a que haya lugar en relación con las Obligaciones Garantizadas que emanan para el Constituyente, la Sociedad y/o terceros que hayan caucionado las Obligaciones Garantizadas, de los contratos referidos en la Cláusula Primera del presente Contrato, son de responsabilidad exclusiva del Constituyente. – CLÁUSULA DÉCIMO NOVENA: FACULTAD ESPECIAL. Diecinueve.Uno. Se faculta al portador de copia autorizada del presente instrumento para notificar, llevar a cabo y requerir de la Sociedad, a través de un Notario Público, la anotación de la Prenda sobre Acciones y prohibición contenidas en este instrumento en el Registro de Accionistas de la Sociedad, y requerir las publicaciones, inscripciones, subinscripciones o cancelaciones que fueren procedentes

32

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

y realizar todos aquellos actos que sean necesarios o convenientes para el perfeccionamiento de dicha Prenda sobre Acciones y prohibición, especialmente en el Registro de Prendas sin Desplazamiento, pudiendo para ello firmar todos los documentos que sean procedentes. Sin perjuicio de lo anterior, cada una de las Partes otorga mandato especial e irrevocable a los señores /i/ don Andrés Sanfuentes Astaburuaga, don Guillermo Vial Yavar, doña Catalina Silva Donoso y don Ignacio Vargas Peña; y /ii/ a don José Luis Ambrosy Eyzaguirre, don Jaime Andrés Salas Vergara y a don Roberto Ignacio Carrillo Almendras para que, actuando uno cualquiera de los cuatro primeros con uno cualquiera de los tres segundos, en nombre y representación de las Partes, puedan redactar cualquier texto necesario para corregir o complementar esta escritura pública y lograr la plena publicación, inscripción, subinscripción y anotación de la constitución de la Prenda sobre Acciones y prohibición en los registros que legalmente corresponda. En uso de sus atribuciones, los mandatarios podrán corregir, rectificar y complementar el contenido de esta escritura, la individualización de las Partes y las Acciones Prendadas, o bien, completar los datos que sean necesarios para el perfeccionamiento de los acuerdos que las Partes han pactado, como asimismo podrán concurrir al otorgamiento de toda clase de instrumentos públicos o privados mediante los cuales se modifique el presente Contrato o modificaciones de los Documentos del Financiamiento, entre otros. Del mismo modo, los mandatarios quedan facultados para

33

reducir a escritura pública esos textos e inscribirlos junto con este instrumento, en el Registro de Accionistas de la Sociedad y para solicitar la rectificación, dentro del plazo de diez Días Hábiles, exceptuados los días sábado, a contar de la fecha de la inscripción de esta prenda en el Registro de Prendas sin Desplazamiento, de las inscripciones que contengan omisiones o errores manifiestos, de conformidad con el artículo dieciséis del Reglamento de Prenda sin Desplazamiento. Los Acreedores, podrán ejercer dicho mandato, en lo que le competa, por medio de sus representantes o por medio de quien éstos designen para tales efectos. Diecinueve.Dos. Se faculta a los mandatarios indicados en la Sección Diecinueve.Uno precedente para que en el desempeño de su cometido puedan requerir, otorgar y firmar toda clase de solicitudes y declaraciones, solicitar inscripciones, anotaciones, cancelaciones y otorgar instrumentos públicos y/o privados para el cumplimiento de los requisitos y formalidades que establezcan las leyes y reglamentos. Las Partes dejan expresa constancia que este mandato se otorga con el carácter de irrevocable y que tal irrevocabilidad se pacta tanto en interés de los mandantes como de los mandatarios. Este mandato no se extinguirá por la disolución de ninguno de los mandantes, pues está destinado, en su caso, a ejecutarse también en caso de su disolución, conforme a lo previsto en el artículo dos mil ciento sesenta y nueve del Código Civil. Diecinueve.Tres. Se faculta además al Notario ante quien se otorga el presente

34

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

instrumento para que, en virtud del artículo octavo del Reglamento de Prenda sin Desplazamiento, envíe para su inscripción en el Registro de Prendas sin Desplazamiento, por medios electrónicos, una copia autorizada de cada contrato de prenda, su modificación o alzamiento, y para llenar al efecto el formulario de solicitud al que alude el artículo noveno del Reglamento de Prenda sin Desplazamiento. Diecinueve.Cuatro. El Acreedor, representado en la forma indicada en la comparecencia, designa y confiere poder a los señores José Luis Ambrosy Eyzaguirre, don Jaime Andrés Salas Vergara y don Roberto Ignacio Carrillo Almendras para que, actuando cualquiera de ellos indistinta y separadamente en representación de los Acreedores, puedan ejercer judicial o extrajudicialmente los derechos y acciones que correspondan a los Acreedores en virtud de lo expresado y estipulado en esta escritura, poder judicial que incluye las facultades del inciso primero del artículo séptimo del Código de Procedimiento Civil, que se dan por reproducidas. Asimismo, el poder se extiende a la facultad de recibir notificaciones en representación de los Acreedores según lo dispuesto en el artículo treinta y siete de la Ley de Prenda sin Desplazamiento. El Constituyente toma conocimiento de este poder, reconoce que ha sido legalmente otorgado, que es válido y vigente, y se obliga a reconocer y aceptar su validez y eficacia cada vez que uno cualquiera de los mandatarios los invoque, judicial o extrajudicialmente. – CLÁUSULA VIGÉSIMA: DENOMINACIÓN

35

DE LAS CLÁUSULAS. Las denominaciones asignadas por las Partes a las distintas estipulaciones de este Contrato han sido establecidas sólo para referencia y facilidad de su lectura, sin afectar el significado o alcance que la Cláusula en su integridad pueda tener distintos que dicha denominación. – CLÁUSULA VIGÉSIMA PRIMERA: NULIDAD E INEFICACIA. La declaración de nulidad o ineficacia de cualquier estipulación contenida en este instrumento hará que dicha estipulación se tenga por no escrita o ineficaz; pero, la nulidad o ineficacia de dicha estipulación, no afectará la validez y eficacia de las restantes estipulaciones del presente instrumento. Con todo, las Partes convienen en reemplazar la disposición nula o ineficaz por otra disposición que sea válida y oponible que logre, en la medida de lo posible, los mismos o similares efectos que perseguía la disposición declarada nula o ineficaz. – CLÁUSULA VIGÉSIMA SEGUNDA: AUSENCIA DE NOVACIÓN Y MODIFICACIÓN. Lo dispuesto en este instrumento no se considerará bajo ninguna circunstancia como modificación, o limitación de los derechos y obligaciones de cada Parte en virtud de la ley, el Contrato de Crédito, los Pagarés que se suscriban de conformidad al mismo y/o los demás Documentos del Financiamiento, ni constituye bajo ningún concepto una novación de las Obligaciones Garantizadas. En consecuencia, los términos establecidos en el Contrato de Crédito, los Pagarés que se suscriban de conformidad al mismo y/o los demás Documentos del Financiamiento prevalecerán sobre lo dispuesto en este instrumento, en todo aquello en que

36

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

fueran incompatibles o inconsistentes. – CLÁUSULA VIGÉSIMO TERCERA: RENUNCIA DE DERECHOS. El hecho que el los Acreedores, no ejercitaren o demoraren el ejercicio de cualquiera de sus derechos de acuerdo con este Contrato y/o los demás Documentos del Financiamiento, no constituirá una renuncia de ellos, como tampoco el ejercicio separado o parcial de algún derecho impedirá el ejercicio de los mismos o de otros derechos. Las acciones y derechos a que aquí se hace referencia son acumulativos y no excluyen ninguna otra acción o derecho reconocido por la ley. – CLÁUSULA VIGÉSIMO CUARTA: DOMICILIO Y COMPETENCIA. Para todos los efectos legales de este Contrato, las Partes fijan su domicilio y se someten a la competencia de los tribunales ordinarios de justicia de la comuna de Santiago de Chile, y fijan su domicilio en la ciudad y comuna de Santiago de Chile. El presente Contrato se regirá por las leyes de la República de Chile. PERSONERÍAS. La personería de don Enzo Rodrigo Contreras Órdenes para representar a GRAÑA Y MONTERO S.A.A. consta del poder otorgado en Lima, Perú con fecha diecinueve de julio de dos mil diecinueve, ante el Notario Luis Dannon Brender. La personería de don Sergio Morales Contreras para representar a ADEXUS S.A. consta de escritura pública de fecha doce de julio de dos mil diecisiete, otorgada en la Notaría de Santiago de doña Myriam Amigo Arancibia, bajo el repertorio número once mil setecientos treinta y nueve guion diecisiete. La personería de don Enzo Contreras Órdenes para representar a ADEXUS S.A. consta de escritura pública

37

de fecha diez de junio de dos mil diecinueve, otorgada en la Notaría de Santiago de doña Myriam Amigo Arancibia, bajo el repertorio número ocho mil setecientos ochenta y ocho guion diecinueve. La personería de don Jaime Andrés Salas Vergara para representar a CS PERU INFRASTRUCTURE HOLDINGS LLC consta de poder otorgado en el extranjero, con fecha dieciocho de julio de dos mil diecinueve, el que debidamente legalizado, fue protocolizado en la Notaría de don Patricio Raby Benavente, con fecha veintitrés de julio de dos mil diecinueve, bajo el Repertorio número siete mil veintisiete guion dos mil diecinueve. Las personerías antes indicadas no se insertan por ser conocidas de las partes y haberlas tenido a la vista el Notario que autoriza. En comprobante y previa lectura firman los comparecientes. Doy fe. –

ENZO RODRIGO CONTRERAS ÓRDENES

PP. GRAÑA Y MONTERO S.A.A.

PP. ADEXUS S.A.

SERGIO MORALES CONTRERAS

PP. ADEXUS S.A.

38

PATRICIO RABY BENAVENTE

NOTARIO PUBLICO

GERTRUDIS ECHENIQUE 30 OF. 32, LAS CONDES

225992453

EMAIL: notariaraby@notariaraby.cl

JAIME ANDRÉS SALAS VERGARA

PP. CS PERU INFRASTRUCTURE HOLDINGS LLC

MÓNICA MARÍA MILOSLAVICH HART

FREDY CHALCO

NOTARIO

ESTA HOJA CORRESPONDE A LA TERMINACIÓN DE LA ESCRITURA DE PRENDA SIN DESPLAZAMIENTO DE SEGUNDO GRADO SOBRE ACCIONES DE ADEXUS S.A. POR GRAÑA Y MONTERO S.A.A. –

NOTARIO

39

Exhibit I

FORM OF TRUST AGREEMENT

(Attached)

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

CONTRATO DE FIDEICOMISO

Fecha: 31 de julio de 2019

FIDEICOMITENTE:	Graña Y Montero S.A.A.
FIDUCIARIO:	La Fiduciaria S.A.
FIDEICOMISARIO:	CS Peru Infrastructure Holdings LLC
DEPOSITARIO:	Daniel René Urbina Pérez

Fideicomiso N° 1339 Página 1 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

Señor Notario:

Sírvase usted extender en su Registro de Escrituras Públicas, una por la cual conste el Contrato de Fideicomiso (en adelante, el “CONTRATO”) que celebran:

I. En calidad de FIDEICOMITENTE:

GRAÑA Y MONTERO S.A.A., con RUC N° 20332600592, con domicilio en Avenida Paseo de la República 4675, Surquillo, Provincia y Departamento de Lima, debidamente representada por el señor Daniel René Urbina Pérez, identificado con DNI N° 09382119 y Francisco Augusto Baertl Montori, identificado con DNI N° 07830436, según poderes inscritos en la Partida Electrónica N° 11028652 del Registro de Personas Jurídicas de Lima (en adelante, el “FIDEICOMITENTE”).

II. En calidad de FIDUCIARIO:

LA FIDUCIARIA S.A., con RUC N° 20501842771, con domicilio en Calle Los Libertadores 155, Piso 8, San Isidro, Provincia y Departamento de Lima, debidamente representada por los señores Rafael Mauricio Parodi Parodi, identificado con DNI N° 10318515 y Diego Alberto Uribe Mendoza, identificado con DNI N° 43307782, según poderes inscritos en los asientos C00034 y C00070, respectivamente, de la Partida Electrónica N° 11263525 del Registro de Personas Jurídicas de Lima (en adelante, “LA FIDUCIARIA”).

III. En calidad de FIDEICOMISARIO:

CS PERU INFRASTRUCTURE HOLDINGS LLC, una sociedad organizada y existente de acuerdo a con las leyes del Estado de Delaware, Estados Unidos de América, debidamente representada por el señor Gian Carlo Panzera Jimenez, identificadocon DNI N° 09872458, según poderes que se adjuntan al presente documento (en adelante, el “FIDEICOMISARIO”).

IV. Interviene en calidad de DEPOSITARIO:

DANIEL RENÉ URBINA PÉREZ, identificado con DNI N° 09382119, con domicilio en Avenida Paseo de la República 4676, Surquillo, Provincia y Departamento de Lima (en adelante, el “DEPOSITARIO”).

El presente CONTRATO se otorga según los términos y condiciones siguientes:

PRIMERA:                               NORMAS DE INTERPRETACIÓN

1.1. En el presente CONTRATO, a menos que se indique de otra manera, deberán aplicarse las siguientes normas de interpretación, sujetas al respectivo contexto donde se encuentren consideradas:

1.1.1. Los términos en singular incluyen el plural y los términos en plural incluyen el singular, salvo para los casos en que se señalan definiciones específicas para el singular y el plural, que deberán ser interpretadas estrictamente con arreglo a dichas definiciones, según se detalla en la Cláusula Segunda.

Fideicomiso N° 1339 Página 2 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

1.1.2. Las palabras que se refieran al género masculino o femenino incluyen al género opuesto correspondiente.

1.1.3. Las referencias a leyes o reglamentos deben ser comprendidas e interpretadas como comprensivas de todas las disposiciones legales o reglamentarias que modifiquen, consoliden, enmienden o reemplacen a las LEYES APLICABLES, la LEY DE BANCOS o al REGLAMENTO mencionados en el presente CONTRATO y que se definen en la Cláusula Segunda.

1.1.4. Las palabras “incluye” e “incluyendo” deben considerarse que se encuentran seguidas de las palabras “sin encontrarse limitado(a) a”.

1.1.5. Las referencias a cláusulas, numerales, acápites, literales, adjuntos, anexos y a otros instrumentos contractuales distintos al presente CONTRATO deben considerarse que incluyen todas las modificaciones, extensiones o cambios de estos.

1.1.6. Cualquier enumeración o relación de conceptos donde exista la conjunción disyuntiva “o” o la conjunción disyuntiva “u” comprende a uno, algunos o a todos los elementos de tal enumeración o relación; y, cualquier enumeración o relación de conceptos donde exista la conjunción copulativa “y” o la conjunción copulativa “e”, incluye a todos y cada uno de los elementos de tal enumeración o relación.

1.2. Todas las referencias en este CONTRATO a una cláusula, numeral o acápite, hacen referencia a la cláusula, numeral o acápite correspondiente del mismo, salvo que el contexto exija una interpretación en sentido contrario. Las referencias en este CONTRATO a una cláusula incluyen todos los numerales y/o párrafos y/o acápites dentro de dicha cláusula y las referencias a un numeral incluyen todos los párrafos y/o literales dentro de este.

1.3. Los títulos de cada cláusula, numeral, acápite y/o literal utilizados en el presente CONTRATO son únicamente referenciales y no definirán ni limitarán el contenido de los mismos.

1.4. Los términos en mayúsculas utilizados en este CONTRATO tendrán el significado que se les atribuye en su Cláusula Segunda del presente instrumento.

1.5. El CONTRATO se rige, de manera integrada, por las cláusulas contenidas en el mismo.

1.6. El solo hecho que alguna de las PARTES no ejerza alguno de los derechos que le confiere el CONTRATO en ningún caso podrá considerarse como una renuncia a tal derecho o una modificación al CONTRATO y el derecho se mantendrá vigente. De la misma manera, cualquier renuncia de una o más PARTES a derechos conferidos por el CONTRATO o modificación o reforma de cualquier disposición contenida en el CONTRATO deberá ser expresa y por escrito y estar debidamente suscrita por la PARTE que renuncie a dicho derecho.

Fideicomiso N° 1339 Página 3 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

1.7. Las PARTES dejan constancia de que las cláusulas y secciones del CONTRATO son separables y que la invalidez, nulidad o anulabilidad de cualquier cláusula, sección o apartado del presente CONTRATO no afectará ni perjudicará la exigibilidad de las restantes cláusulas del CONTRATO.

Asimismo, es la intención de las PARTES sustituir cualquier término, apartado o cláusula inválida, nula, o anulable por una cláusula o apartado válido y exigible en unos términos lo más similares posible a la cláusula o apartado inválido, nulo o anulable. Por ello, en el supuesto de que cualquier apartado o cláusula del CONTRATO fuera declarado nulo o no exigible por un tribunal, juez, autoridad o árbitro competente, las PARTES acordarán su sustitución por otra cláusula válida, pero con unos términos y efecto lo más equivalentes posibles a los del apartado o cláusula original.

SEGUNDA:                                DEFINICIONES

Para efectos del CONTRATO, y sin perjuicio de lo señalado en la Cláusula anterior, todas las palabras que sean utilizadas en mayúscula son términos definidos y tendrán el significado previsto para ellos en esta Cláusula. Las definiciones acordadas por las PARTES para los términos definidos contenidos en esta Cláusula corresponden al significado que las PARTES han asignado a dichos términos y dicho significado será el único aceptado para todos los efectos, a menos que las PARTES lo acuerden de otra forma por escrito:

ACCIONES ADEXUS:	Son 334.499 acciones ordinarias, de una sola serie, nominativas y sin valor nominal representativas del 99,99% del capital social de ADEXUS, de titularidad del FIDEICOMITENTE. La definición de ACCIONES ADEXUS incluye cualquier acción y/u otro título valor representativo del capital social y/o del patrimonio de ADEXUS que sea emitido a favor del FIDEICOMITENTE con posterioridad a la suscripción del CONTRATO.
ACCIONES ADEXUS GRAVADAS:	Son las 37,929 ACCIONES ADEXUS que se encuentran gravadas por la PRENDA EXISTENTE.
ACCIONES GMP:	Son 96’141,984 acciones nominativas con derecho a voto representativas del 94.99% del capital social de GMP, de titularidad del FIDEICOMITENTE. La definición de ACCIONES GMP incluye cualquier acción que confiera al FIDEICOMITENTE derechos a percibir dividendos respecto de GMP que sea emitida a favor del FIDEICOMITENTE con posterioridad a la suscripción del CONTRATO.
ACCIONES GYM FERROVÍAS:	Son 25’026,250 acciones clases A y 50’052,500 acciones clases B, nominativas con derecho a voto, representativas del 75% del capital social de GYM FERROVÍAS, de titularidad del FIDEICOMITENTE. La definición de ACCIONES GYM FERROVÍAS incluye cualquier acción que confiera al FIDEICOMITENTE derechos a percibir dividendos respecto de GYM FERROVÍAS que sea emitida a favor del FIDEICOMITENTE con posterioridad a la suscripción del CONTRATO.

Fideicomiso N° 1339 Página 4 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

ACCIONES NORVIAL:	Son 10’034,813 acciones clases A nominativas con derecho a voto, representativas del 18.20% del capital social de NORVIAL, de titularidad del FIDEICOMITENTE. La definición de ACCIONES NORVIAL incluye cualquier acción que confiera al FIDEICOMITENTE derechos a percibir dividendos respecto de NORVIAL que sea emitido a favor del FIDEICOMITENTE con posterioridad a la suscripción del CONTRATO.
ADEXUS	Es Adexus S.A., sociedad conformada de acuerdo a las Leyes de la República de Chile.
ANEXOS:	Son los documentos a los que se hace referencia como ANEXO 1 al ANEXO 9 –que a continuación se señalan- que constituyen parte integrante del presente CONTRATO y que tendrán la misma validez y eficacia que el CONTRATO; estipulándose asimismo que cualquier referencia al presente CONTRATO incluirá sus ANEXOS, así como cualquier modificación a los mismos.
	ANEXO 1: Cronograma
	ANEXO 2: Modelo de Notificación de Aceleración
	ANEXO 3: Modelo de Notificación de Cese de Incumplimiento
	ANEXO 4: Modelo de Notificación de Incumplimiento
	ANEXO 5 – A: Modelo de Comunicación a GMP
	ANEXO 5 – B: Modelo de Instrucción Irrevocable a GYM
	FERROVÍAS y NORVIAL
	ANEXO 6: Relación de EMPRESAS AUDITORAS
	ANEXO 7: Modelo de Cambio de Información de Contracto
	ANEXO 7(i): Ficha de Registro de Firmas
	ANEXO 8: Relación de Estudios de Abogados
	ANEXO 9: Modelo de Minuta Unilateral de Cumplimiento de Condición Suspensiva Venta Adexus
	ANEXO 10: Modelo de Minuta Unilateral de Cumplimiento de Condición Suspensiva Dividendos Adexus
AUTORIDAD GUBERNAMENTAL:	Es, en la República del Perú, cualquier entidad que ejerza funciones ejecutivas, legislativas, judiciales o arbitrales, municipales, regulatorias o administrativas de, o que correspondan, a funciones de gobierno y ejerzan jurisdicción sobre cualquier persona o materia en cuestión, con competencia según las LEYES APLICABLES.
BANCO:	Es el Banco de Crédito del Perú, entidad bancaria en la que se abrirán las CUENTAS RECAUDADORAS.
BIENES FIDEICOMETIDOS:	Son, de manera conjunta, los:
	(i) DERECHOS DE COBRO; y,
	(ii)  FLUJOS DINERARIOS.

Fideicomiso N° 1339 Página 5 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

COMUNICACIÓN DE PAGO:	Es la comunicación que enviará el FIDEICOMITENTE a LA FIDUCIARIA, con copia al FIDEICOMISARIO, indicando que realizará un DEPÓSITO FIDEICOMITENTE, el importe del mismo, e instruyendo a LA FIDUCIARIA a transferir dicho importe de la CUENTA RECAUDADORA en DÓLARES a la CUENTA DESTINO FIDEICOMISARIO, en la oportunidad indicada en dicha comunicación.
	La COMUNICACIÓN DE PREPAGO será enviada por el FIDEICOMITENTE a LA FIDUCIARIA con al menos cinco (5) DÍAS HÁBILES previos a la oportunidad en la que, según dicha comunicación, deba realizarse la transferencia a la CUENTA DESTINO FIDEICOMISARIO.
CONDICIÓN SUSPENSIVA DIVIDENDOS ADEXUS:	Tiene el significado establecido en la Tercera Cláusula Adicional del presente Contrato.
CONDICIÓN SUSPENSIVA VENTA ADEXUS:	Tiene el significado establecido en la Segunda Cláusula Adicional del presente Contrato.
CONOCIMIENTO:	Es, con respecto al FIDEICOMITENTE, el conocimiento que tiene el gerente general, el gerente de finanzas, el gerente comercial, el gerente legal y el contador general del FIDEICOMITENTE (y, de no existir tales posiciones, o personas designadas para dichas posiciones, la persona que se encuentre a cargo de las funciones que típicamente se asignan a dichas posiciones en compañías con negocios similares).
CONTRATO:	Es el presente Contrato de Fideicomiso y sus ANEXOS –según fuere o fueren modificados de tiempo en tiempo-, así como sus posteriores ampliaciones o modificaciones.
CONTRATO DE FIDEICOMISO GM:	Es el contrato de fideicomiso de flujos celebrado el 18 de octubre de 2017 entre el FIDEICOMITENTE, Viva GyM S.A., y CAM Holdings S.p.A, en calidad de fideicomitentes; LA FIDUCIARIA, en calidad de fiduciaria., Credit Suisse AG, Cayman Islands Branch, Natixis, New York Branch, Chubb Perú S.A. Compañía de Seguros y Reaseguros, y LA FIDUCIARIA, en calidad de representantes de los fideicomisarios y Luis Francisco Díaz Olivero en calidad de depositario.
CONTRATO DE GARANTÍA MOBILIARIA GYM FERROVÍAS:	Es el contrato de garantía mobiliaria sobre acciones representativas del capital social de GYM Ferrovías S.A., celebrado con fecha 09 de febrero de 2015 entre el FIDEICOMITENTE, Ferrovías Participaciones S.A., Citibank N.A., GYM FERROVÍAS y Citibank del Perú S.A.

Fideicomiso N° 1339 Página 6 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

CONTRATOS DE GARANTÍA MOBILIARIA NORVIAL:	Son los contratos de garantía mobiliaria sobre acciones clase A y clase B representativas del capital social de Norvial S.A., respectivamente, ambos celebrados con fecha 18 de junio de 2015 entre el FIDEICOMITENTE, JJC Contratistas Generales S.A., Scotiabank Perú S.A.A. y NORVIAL.
CONTRATO DE PRÉSTAMO:	Es el contrato de préstamo (Loan Agreement) de fecha 31 de julio de 2019 suscrito entre el FIDEICOMITENTE y el FIDEICOMISARIO y sus anexos, así como sus posteriores ampliaciones o modificaciones.
CONVENIO DE RETRIBUCIONES:	Es el instrumento que recoge las comisiones que cobrará LA FIDUCIARIA al FIDEICOMITENTE por las labores detalladas en el presente CONTRATO y las LEYES APLICABLES.
CRONOGRAMA:	Será el cronograma que contiene: (i) las fechas de pago y los importes de las CUOTAS INTERESES, de manera trimestral, que deberá realizar LA FIDUCIARIA en cada FECHA DE PAGO INTERESES, de acuerdo a lo establecido en el CONTRATO DE PRÉSTAMO; y (ii) las fechas de pago y los importes de las CUOTAS CAPITAL, que deberá realizar LA FIDUCIARIA en cada FECHA DE PAGO CAPITAL, de acuerdo a lo establecido en el CONTRATO DE PRÉSTAMO.
	El CRONOGRAMA se encuentra detallado en el ANEXO 1 del presente CONTRATO y podrá ser modificado según el mecanismo definido en el numeral 7.5 de la Cláusula Séptima del presente CONTRATO.
CUENTAS DEL FIDEICOMISO:	Son, de manera conjunta, las (i) CUENTAS RECAUDADORAS; y (ii) la CUENTA TRANSITORIA.
CUENTA DESTINO FIDEICOMITENTE:	Será la cuenta de titularidad del FIDEICOMITENTE cuyos datos serán informados por el FIDEICOMITENTE a LA FIDUCIARIA, mediante comunicación escrita, dentro de los cinco (5) DÍAS HÁBILES desde la suscripción del CONTRATO.
	Se deja constancia que, el FIDEICOMITENTE podrá modificar el número y banco de la CUENTA DESTINO FIDEICOMITENTE bastando para ello un aviso a LA FIDUCIARIA en tal sentido como por lo menos cinco (5) DÍAS HÁBILES de anticipación respecto de la fecha en que LA FIDUCIARIA debiese realizar las transferencias respectivas.
CUENTA DESTINO FIDEICOMISARIO:	Será la cuenta de titularidad del FIDEICOMISARIO, abierta en un banco nacional, cuyos datos serán informados por el FIDEICOMISARIO a LA FIDUCIARIA, mediante comunicación escrita, dentro de los cinco (5) DÍAS HÁBILES desde la suscripción del CONTRATO.

Fideicomiso N° 1339 Página 7 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

	Se deja constancia que, el FIDEICOMISARIO podrá modificar el número y banco de la CUENTA DESTINO FIDEICOMISARIO bastando para ello un aviso a LA FIDUCIARIA en tal sentido como por lo menos cinco (5) DÍAS HÁBILES de anticipación respecto de la fecha en que LA FIDUCIARIA debiese realizar las transferencias respectivas.
CUENTAS RECAUDADORAS:	Serán las cuentas dinerarias denominadas “LF Fid. GYM Gramercy Rec. Soles” y “LF Fid. GYM Gramercy Rec. Dólares” en SOLES y DÓLARES que LA FIDUCIARIA solicitará abrir en el BANCO, en la oportunidad indicada en la Cláusula Octava del presente CONTRATO.
	Se deja constancia que las CUENTAS RECAUDADORAS son las “Dividend Collection Account” (según dicho término se define en el CONTRATO DE PRÉSTAMO).
	La administración de las CUENTAS RECAUDADORAS se efectuará de conformidad con el procedimiento establecido en la Cláusula Octava del presente CONTRATO.
CUENTA TRANSITORIA:	Será la cuenta dineraria denominada “LF Fid. GYM Gramercy Transitoria” en DÓLARES que LA FIDUCIARIA solicitará abrir en un banco de primer nivel en Chile, en el BANCO o en un banco local, en la oportunidad indicada en la Cláusula Octava del presente CONTRATO.
	Las PARTES dejan constancia que conocen que LA FIDUCIARIA no será responsable en caso no sea posible para LA FIDUCIARIA conseguir abrir una CUENTA TRANSITORIA en una banco en Chile. Sin perjuicio de ello, será responsabilidad del FIDEICOMITENTE gestionar y coordinar, de manera conjunta con LA FIDUCIARIA la documentación y demás requisitos solicitados por el banco en Chile para la apertura de dicha cuenta.
	La administración de la CUENTA TRANSITORIA se efectuará de conformidad con el procedimiento establecido en la Cláusula Octava del presente CONTRATO.
CUOTA CAPITAL:	Será el monto que de acuerdo al CRONOGRAMA deberá transferir LA FIDUCIARIA de la CUENTA RECAUDADORA a la CUENTA DESTINO FIDEICOMISARIO en cada una de las FECHAS DE PAGO CAPITAL, de conformidad con el CONTRATO DE PRÉSTAMO.
CUOTA INTERESES:	Será el monto que de acuerdo al CRONOGRAMA deberá transferir LA FIDUCIARIA de la CUENTA RECAUDADORA a la CUENTA DESTINO FIDEICOMISARIO en cada una de las FECHAS DE PAGO INTERESES, de conformidad con el CONTRATO DE PRÉSTAMO.

Fideicomiso N° 1339 Página 8 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

DEPOSITARIO:	Será la persona natural con rango gerencial o directivo del FIDEICOMITENTE que, a título gratuito custodiará los BIENES FIDEICOMETIDOS que conforman el PATRIMONIO FIDEICOMETIDO, o quien lo sustituya, de conformidad con el procedimiento señalado en el numeral 7.4 de la Cláusula Séptima del presente CONTRATO.
DEPÓSITOS FIDEICOMITENTE:	Son los depósitos que pudiera efectuar el FIDEICOMITENTE en la CUENTA RECAUDADORA en DÓLARES ya sea para efectos de cumplir con un pago mandatorio (Mandatory Repayments), para realizar un prepago voluntario (Voluntary Prepayments) bajo el CONTRATO DE PRÉSTAMO o para atender otros pagos que son exigibles y pagaderos bajo los DOCUMENTOS DEL PRÉSTAMO.
DERECHOS DE COBRO:	Son, de manera conjunta, los:
	(i) DERECHOS DE COBRO VENTA ADEXUS;
	(ii)  DERECHOS DE COBRO DIVIDENDOS.
DERECHOS DE COBRO DIVIDENDOS:	Son, de manera conjunta, los:
	(i) DERECHOS DE COBRO GMP; y
	(ii)  DERECHOS DE COBRO DIVIDENDOS ADEXUS.
DERECHOS DE COBRO DIVIDENDOS ADEXUS:	Son los derechos de cobro respecto de cualquier dividendo, distribución de utilidades o reembolso o devolución de capital (ya sea en efectivo o en especie) que correspondan al FIDEICOMITENTE como titular de las ACCIONES ADEXUS, incluyendo pero sin limitarse a exigir, demandar y recibir el pago de todos los importes que por concepto de repartición de dividendos se acuerden distribuir en beneficio del FIDEICOMITENTE como accionista de ADEXUS, en la modalidad que se acuerde en dicha junta de accionistas de ADEXUS, pagos de dividendos provisorios, reducciones de capital, o cualquier otro reparto que indique una participación en el patrimonio de ADEXUS o participación en el patrimonio neto resultante de la liquidación de ADEXUS que deben ser entregados al FIDEICOMITENTE.
	Las PARTES acuerdan que, única y exclusivamente respecto de las ACCIONES ADEXUS GRAVADAS, la transferencia de los DERECHOS DE COBRO DIVIDENDOS ADEXUS correspondientes a dichas acciones, quedará sujeta al cumplimiento de la CONDICIÓN SUSPENSIVA DIVIDENDOS ADEXUS.
DERECHOS DE COBRO GMP:	Son los derechos de cobro respecto de cualquier dividendo declarado, distribución de utilidades o reembolso o devolución de capital (ya sea en efectivo o en especie) que correspondan al FIDEICOMITENTE como titular de las ACCIONES GMP, incluyendo pero sin limitarse a exigir, demandar y recibir el pago de todos los

Fideicomiso N° 1339 Página 9 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

	importes que por concepto de repartición de dividendos se acuerden distribuir en beneficio del FIDEICOMITENTE como accionista de GMP, en la modalidad que se acuerde en dicha junta de accionistas de GMP, adelantos de dividendos, reducciones de capital, liberación de reservas o cualquier otra cuenta que indique una participación en el patrimonio de GMP o participación en el patrimonio neto resultante de la liquidación de GMP que deben ser entregados al FIDEICOMITENTE.
DERECHOS DE COBRO VENTA ADEXUS:	Son los derechos de crédito, presentes y futuros, determinados o determinables, que otorgan legitimidad para exigir, demandar y recibir el pago de todas las sumas de dinero adeudadas al FIDEICOMITENTE, incluido el derecho a percibir intereses compensatorios o moratorios, penalidades, indemnizaciones, comisiones u otros conceptos, según sea el caso, por la venta de las ACCIONES ADEXUS. Para tales efectos, se entenderá como “venta” cualquier tipo venta, transferencia, cesión de derechos, traspaso o reorganización corporativa que involucre a las ACCIONES ADEXUS o a todos (o significativamente todos) los activos de ADEXUS. Los derechos de cobro sobre las ACCIONES ADEXUS que a la fecha se encuentran en prenda en virtud de la PRENDA EXISTENTE, se entenderán automáticamente incorporadas a esta definición a partir del momento en que se cancele la obligación garantizada de los acreedores en primer rango, conforme los términos del CONTRATO DE PRÉSTAMO. Las PARTES acuerdan que la transferencia de los DERECHOS DE COBRO VENTA ADEXUS quedará sujeta al cumplimiento de la CONDICIÓN SUSPENSIVA VENTA ADEXUS.
DÍA HÁBIL:	Es cualquier día, distinto de sábado, domingo o un feriado en Perú o en Nueva York, Estados Unidos, en el cual los bancos comerciales estén autorizados u obligados por ley a abrir sus oficinas en la ciudad de Lima; y/o la ciudad de Nueva York.
DOCUMENTOS DEL PRÉSTAMO:	Tiene el mismo significado establecido para el término “Credit Documents” en el CONTRATO DE PRÉSTAMO.
DÓLARES o USD:	Es la moneda de curso legal de los Estados Unidos de América.
EMPRESAS AUDITORAS:	Son las empresas auditoras indicadas en el ANEXO 6 del presente CONTRATO.
EVENTO DE INCUMPLIMIENTO:	Es cualquier evento, hecho o circunstancia que configure un: (i) evento de incumplimiento (“Event of Default”) bajo el CONTRATO DE PRÉSTAMO; y/o (ii) incumplimiento de las obligaciones asumidas por el FIDEICOMITENTE en virtud del presente CONTRATO.

Fideicomiso N° 1339 Página 10 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

	Para efectos de aclarar cualquier duda, se deja constancia que las declaraciones emitidas por el FIDEICOMITENTE en virtud de la Cláusula Quinta del presente CONTRATO serán consideradas para todos los efectos entre las Partes como “representations and warranties” bajo la Sección 9.07 y demás aplicables del CONTRATO DE PRÉSTAMO, según los términos y limitaciones aquí descritos. Queda claramente establecido que para la configuración de un EVENTO DE INCUMPLIMIENTO no se requerirá intimación en mora o requerimiento al FIDEICOMITENTE bajo el presente CONTRATO, sin perjuicio de lo cual se deberá seguir el procedimiento establecido en la Cláusula Octava del CONTRATO.
FACTOR FIDUCIARIO:	Es la persona natural a ser designada por LA FIDUCIARIA de conformidad con lo establecido en la Cláusula Décimo Octava del presente CONTRATO.
FECHA DE PAGO CAPITAL:	Será la fecha en la que, de acuerdo a lo establecido en el CRONOGRAMA, LA FIDUCIARIA deberá transferir la totalidad de la CUOTA CAPITAL acreditada en la CUENTA RECAUDADORA a la CUENTA DESTINO FIDEICOMISARIO. En caso la FECHA DE PAGO CAPITAL no sea un DÍA HÁBIL, se tomará como fecha de pago el DÍA HÁBIL inmediato anterior.
FECHA DE PAGO INTERESES:	Es el Quarterly Payment Date, según dicho término se define en el CONTRATO DE PRÉSTAMO, es decir, la fecha en la que, de acuerdo a lo establecido en el CRONOGRAMA y el presente CONTRATO, LA FIDUCIARIA deberá transferir la totalidad de la CUOTA INTERESES acreditada en la CUENTA RECAUDADORA a la CUENTA DESTINO FIDEICOMISARIO. En caso la FECHA DE PAGO INTERESES no sea un DÍA HÁBIL, se tomará como fecha de pago el DÍA HÁBIL inmediato anterior.
FIDEICOMISARIO:	Es la persona señalada en la introducción del presente CONTRATO, beneficiario del PATRIMONIO FIDEICOMETIDO constituido en virtud del presente CONTRATO.
FIDEICOMITENTE:	Es la persona señalada en la introducción del presente CONTRATO, quien aporta al PATRIMONIO FIDEICOMETIDO los BIENES FIDEICOMETIDOS.

Fideicomiso N° 1339 Página 11 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

FLUJOS DINERARIOS:	Son, de manera conjunta, los: (i) FLUJOS DINERARIOS VENTA ADEXUS; y, (ii)  FLUJOS DINERARIOS DIVIDENDOS.
FLUJOS DINERARIOS DIVIDENDOS:	Son, de manera conjunta, los: (i) FLUJOS DINERARIOS GMP; (ii)  FLUJOS DINERARIOS GYM FERROVÍAS; (iii)  FLUJOS DINERARIOS NORVIAL; y (iv) FLUJOS DINERARIOS DIVIDENDOS ADEXUS.
FLUJOS DINERARIOS DIVIDENDOS ADEXUS:	Son los flujos dinerarios derivados de los DERECHOS DE COBRO DIVIDENDOS ADEXUS, menos el monto correspondiente a los tributos que deban ser pagados y/o retenidos como consecuencia del reparto de FLUJOS DINERARIOS DIVIDENDOS ADEXUS, según sea el caso. Las PARTES acuerdan que, única y exclusivamente respecto de las ACCIONES ADEXUS GRAVADAS, la transferencia de los FLUJOS DINERARIOS DIVIDENDOS ADEXUS correspondientes a dichas acciones quedará sujeta al cumplimiento de la CONDICIÓN SUSPENSIVA DIVIDENDOS ADEXUS.
FLUJOS DINERARIOS GMP:	Son los flujos dinerarios derivados de los DERECHOS DE COBRO GMP, menos el monto correspondiente a los tributos que deban ser pagados y/o retenidos como consecuencia del reparto de FLUJOS DINERARIOS GMP, según sea el caso.
FLUJOS DINERARIOS GYM FERROVÍAS:	Son la totalidad de flujos dinerarios que correspondan al FIDEICOMITENTE, como titular de las ACCIONES GYM FERROVÍAS, por concepto de repartición de dividendos declarados, repartición de utilidades o reembolso o devolución de capital, en la modalidad que se acuerde en dicha junta de accionistas, incluyendo pero sin limitarse a los flujos dinerarios derivados de adelantos de dividendos, reducciones de capital, liberación de reservas o cualquier otra cuenta que indique una participación en el patrimonio de GYM FERROVÍAS o participación en el patrimonio neto resultante de la liquidación de GYM FERROVÍAS que deben ser entregados al FIDEICOMITENTE. A los montos totales correspondientes a los dividendos declarados, reembolsos o devoluciones de capital antes mencionados, se les deberá restar el monto correspondiente a los tributos que deban ser pagados y/o sean retenidos como consecuencia del reparto de los mismos. Se deja constancia que el pago de los FLUJOS DINERARIOS GYM FERROVÍAS está sujeto a un derecho preferente para el pago de las obligaciones garantizadas bajo el CONTRATO DE GARANTÍA MOBILIARIA GYM FERROVÍAS, en caso de ejecución de la garantía mobiliaria constituida en virtud de dicho contrato, conforme a sus términos y condiciones.

Fideicomiso N° 1339 Página 12 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

	Finalmente, el FIDEICOMISARIO conoce y acepta que, sin perjuicio de que la junta general de accionistas de GYM FERROVÍAS acuerde el reparto de dividendos, el pago efectivo de dicha distribución se encuentra sujeta a que no se haya verificado, o que la distribución no suponga, un evento de incumplimiento bajo el INDENTURE.
FLUJOS DINERARIOS NORVIAL:	Son la totalidad de flujos dinerarios que correspondan al FIDEICOMITENTE, como titular de las ACCIONES NORVIAL, por concepto de repartición de dividendos declarados, repartición de utilidades o reembolso o devolución de capital, en la modalidad que se acuerde en dicha junta de accionistas, incluyendo pero sin limitarse a los flujos dinerarios derivados de adelantos de dividendos, reducciones de capital, liberación de reservas o cualquier otra cuenta que indique una participación en el patrimonio de NORVIAL o participación en el patrimonio neto resultante de la liquidación de NORVIAL que deben ser entregados al FIDEICOMITENTE. A los montos totales correspondientes a los dividendos declarados, reembolsos o devoluciones de capital antes mencionados, se les deberá restar el monto correspondiente a los tributos que deban ser pagados y/o sean retenidos como consecuencia del reparto de los mismos. Se deja constancia que el pago de los FLUJOS DINERARIOS NORVIAL está sujeto a un derecho preferente para el pago de las obligaciones garantizadas bajo los CONTRATOS DE GARANTÍA MOBILIARIA NORVIAL, en caso de ejecución de la garantía mobiliaria constituida en virtud de dicho contrato, conforme a sus términos y condiciones.
FLUJOS DINERARIOS VENTA ADEXUS:	Son la totalidad de flujos dinerarios de los DERECHOS DE COBRO VENTA ADEXUS, menos (i) todos aquellos costos, gastos y/o tributos que se originen como consecuencia de la venta; y, (ii) el monto que se pudiera acordar retener o mantener en una cuenta escrow en el marco de la venta de las ACCIONES ADEXUS. Sin perjuicio de lo anterior, queda convenido que una vez se liberen a favor del FIDEICOMITENTE los montos señalados en el literal (ii) del párrafo anterior, los mismos serán considerados automáticamente como FLUJOS DINERARIOS VENTA ADEXUS y, por tanto, deberán ser transferidos inmediatamente al PATRIMONIO FIDEICOMETIDO. Los FLUJOS DINERARIOS VENTA ADEXUS deberán ser depositados en la CUENTA TRANSITORIA o en cualquier otra cuenta que sea indicada por el FIDEICOMISARIO al FIDEICOMITENTE, con copia a LA FIDUCIARIA, en cuyo caso LA FIDUCIARIA suscribirá unilateralmente todos los documentos necesarios para acreditar

Fideicomiso N° 1339 Página 13 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

	la desafectación del DERECHO DE COBRO VENTA ADEXUS y del FLUJO DINERARIO VENTA ADEXUS respecto del PATRIMONIO FIDEICOMETIDO, lo cual deberá ser solicitado por el FIDEICOMISARIO a LA FIDUCIARIA con copia al FIDEICOMITENTE. Las PARTES acuerdan que la transferencia de los FLUJOS DINERARIOS VENTA ADEXUS quedará sujeta al cumplimiento de la CONDICIÓN SUSPENSIVA VENTA ADEXUS.
GMP:	Es Graña y Montero Petrolera S.A.
GYM FERROVÍAS:	Es GYM Ferrovías S.A.
INDENTURE:	Es el contrato denominado “Indenture” celebrado el 10 de febrero de 2015 entre GYM FERROVÍAS y Citibank N.A., en el cual se regula, entre otros, la emisión de determinados bonos.
LA FIDUCIARIA:	Es La Fiduciaria S.A., una sociedad anónima constituida y en existencia de conformidad con la legislación de la República del Perú, autorizada para operar como Empresa de Servicios Fiduciarios por la SBS, de conformidad con la Resolución SBS N° 243-2001, de fecha 30 marzo de 2001, encontrándose facultada para administrar patrimonios fideicometidos.
LEY DE BANCOS:	Es la Ley General del Sistema Financiero y del Sistema de Seguros y Orgánica de la Superintendencia de la SBS, Ley N° 26702, así como aquellas normas que en el futuro pudieran modificarla o reemplazarla.
LEYES APLICABLES:	Son todas las normas con rango constitucional, legal, reglamentario y demás disposiciones de carácter vinculante expedidas por la AUTORIDAD GUBERNAMENTAL correspondiente.
NORVIAL:	Es Norvial S.A.
NOTIFICACIÓN DE ACELERACIÓN:	Es la comunicación, sustancialmente de acuerdo al modelo establecido en el ANEXO 2 del presente CONTRATO, remitida notarialmente por FIDEICOMISARIO a LA FIDUCIARIA, con copia al FIDEICOMITENTE. Mediante la NOTIFICACIÓN DE ACELERACIÓN, el FIDEICOMISARIO declara y comunica a LA FIDUCIARIA: (i) que se ha verificado un EVENTO DE INCUMPLIMIENTO; e (ii) instruye a LA FIDUCIARIA a administrar el PATRIMONIO FIDEICOMETIDO, de acuerdo a lo establecido en el numeral 8.5 de la Cláusula Octava del presente CONTRATO.

Fideicomiso N° 1339 Página 14 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

NOTIFICACIÓN DE CESE DE INCUMPLIMIENTO:	Es la notificación –sustancialmente de acuerdo al modelo establecido en el ANEXO 3 del presente CONTRATO, -remitida notarialmente por el FIDEICOMISARIO a LA FIDUCIARIA, con copia al FIDEICOMITENTE, mediante la cual el FIDEICOMISARIO, declara y comunica a LA FIDUCIARIA: (i) que el FIDEICOMITENTE ha subsanado el EVENTO DE INCUMPLIMIENTO; y, (ii) solicita se proceda a administrar el PATRIMONIO FIDEICOMETIDO, de acuerdo a lo establecido en el numeral 8.4 de la Cláusula Octava del presente CONTRATO.
NOTIFICACIÓN DE INCUMPLIMIENTO:	Es la comunicación, sustancialmente de acuerdo al modelo establecido en el ANEXO 4 del presente CONTRATO, remitida notarialmente por el FIDEICOMISARIO a LA FIDUCIARIA, con copia al FIDEICOMITENTE. Mediante la NOTIFICACIÓN DE INCUMPLIMIENTO el FIDEICOMISARIO declara y comunica a LA FIDUCIARIA: (i) que se ha configurado un EVENTO DE INCUMPLIMIENTO; y, (ii) solicita se proceda a administrar el PATRIMONIO FIDEICOMETIDO, de acuerdo a lo establecido en numeral 8.3 de la Cláusula Octava del presente CONTRATO.
OBLIGACIONES GARANTIZADAS:	Tiene el mismo significado establecido para el término “Obligations” en el CONTRATO DE PRÉSTAMO, incluyendo, sin limitación y de la forma más amplia posible, las obligaciones de pagar el capital (incluyendo el reajuste del capital), intereses compensatorios y moratorios, y cualquier interés que se devengue con ocasión de los DOCUMENTOS DEL PRÉSTAMO, penalidades, comisiones, tributos, honorarios de asesores, indemnizaciones, gastos de cobranza y/o de ejecución judicial o extrajudicial y cualquier otro costo, gasto de administración y ejecución o suma de dinero que se genere en relación a los DOCUMENTOS DEL PRÉSTAMO, así como sus ampliaciones, renovaciones, modificaciones o variaciones, que en su oportunidad se acuerden. De este modo, forman también parte de las OBLIGACIONES GARANTIZADAS las obligaciones de pago y de hacer y no hacer asumidas por el FIDEICOMITENTE a favor del FIDEICOMISARIO bajo los DOCUMENTOS DEL PRÉSTAMO, entendiéndose de manera especial pero no restrictiva, los notariales, los de publicación del fideicomiso conforme lo establecido en el artículo 245° de la Ley de Bancos, los registrales, judiciales, extrajudiciales y de arbitraje, portes, tributos y comisiones bancarias por las CUENTAS DEL FIDEICOMISO, comisiones de LA FIDUCIARIA, así como los tributos, gastos y costos que se generen como consecuencia de la constitución, administración, tasación, valorización, defensa, ejecución y devolución, de ser el caso, del PATRIMONIO FIDEICOMETIDO, -incluyendo los conceptos comprendidos dentro de los gastos y costos que se encuentran

Fideicomiso N° 1339 Página 15 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

	detallados en la Cláusula Vigésimo Segunda del presente CONTRATO, los mismos que serán asumidos por el FIDEICOMITENTE.
OBLIGACIONES GARANTIZADAS GYM FERROVÍAS:	Son todas aquellas obligaciones contenidas bajo la definición de “Obligaciones Garantizadas” en el CONTRATO DE GARANTÍA MOBILIARIA GYM FERROVÍAS.
PARTES:	Son, de manera conjunta, el FIDEICOMITENTE; el FIDEICOMISARIO; y, LA FIDUCIARIA.
PATRIMONIO FIDEICOMETIDO:	Es el patrimonio autónomo denominado “La Fiduciaria Fid. GYM Gramercy” que se constituye en virtud al presente CONTRATO y que se encuentra conformado por los BIENES FIDEICOMETIDOS, así como todo aquello que de hecho y por derecho les corresponda, de acuerdo a lo establecido en este CONTRATO.
PERSONA:	Es cualquier persona natural o jurídica, asociación de hecho o de derecho, fideicomiso, patrimonio autónomo, entidad del gobierno o similar.
PRENDA EXISTENTE:	Es el Adexus Financing Lien, según dicho término se define en el CONTRATO DE PRÉSTAMO.
REGLAMENTO:	Es el Reglamento del Fideicomiso y de las Empresas de Servicios Fiduciarios, aprobado mediante Resolución SBS N° 1010-99, así como aquellas normas que en el futuro pudieran modificarla o reemplazarla.
SBS:	Es la Superintendencia de Banca, Seguros y AFP, o la entidad que, de ser el caso, asuma sus funciones.
SOCIEDADES EMISORAS:	Se refiere, conjuntamente, a: (i) GMP; (ii)  GYM FERROVÍAS; y (iii)  NORVIAL.
SOLES o S/:	Es la moneda de curso legal de la República del Perú.

TERCERA:                                                  ANTECEDENTES

3.1 Con fecha 31 de julio de 2019, el FIDEICOMITENTE y el FIDEICOMISARIO suscribieron el CONTRATO DE PRÉSTAMO.

3.2 En virtud a lo señalado en el numeral anterior, el FIDEICOMITENTE y el FIDEICOMISARIO han acordado que se constituya un PATRIMONIO FIDEICOMETIDO en beneficio del FIDEICOMISARIO, con el objeto que LA FIDUCIARIA asuma el

Fideicomiso N° 1339 Página 16 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

encargo de administrar el PATRIMONIO FIDEICOMETIDO, según los términos y condiciones del presente CONTRATO, y que dicho PATRIMONIO FIDEICOMETIDO sirva como medio de pago y en respaldo del cumplimiento de las OBLIGACIONES GARANTIZADAS asumidas en virtud de los DOCUMENTOS DEL PRÉSTAMO ante la verificación de un EVENTO DE INCUMPLIMIENTO.

CUARTA: OBJETO Y FINALIDAD DEL CONTRATO

4.1 El objeto del CONTRATO es la constitución del PATRIMONIO FIDEICOMETIDO con carácter irrevocable, para lo cual el FIDEICOMITENTE -de conformidad con lo dispuesto en el artículo 241 de la LEY DE BANCOS-, transfieren irrevocablemente en dominio fiduciario a LA FIDUCIARIA los bienes y derechos que conforman el PATRIMONIO FIDEICOMETIDO.

4.2 La finalidad del CONTRATO es que el PATRIMONIO FIDEICOMETIDO sirva como: (i) medio de pago del íntegro de las OBLIGACIONES GARANTIZADAS; y, (ii) garantizar el pago total y oportuno de todas y cada una de las OBLIGACIONES GARANTIZADAS.

4.3 También es finalidad del CONTRATO que, en el supuesto caso que ocurra un EVENTO DE INCUMPLIMIENTO, y el FIDEICOMISARIO, de acuerdo a lo establecido los DOCUMENTOS DEL PRÉSTAMO, remita una NOTIFICACIÓN DE INCUMPLIMIENTO o una NOTIFICACIÓN DE ACELERACIÓN, bajo los términos establecidos en el CONTRATO, LA FIDUCIARIA proceda a administrar el PATRIMONIO FIDEICOMETIDO de conformidad con lo dispuesto en el numeral 8.3y siguientes de la Cláusula Octava del presente CONTRATO.

QUINTA: DECLARACIONES DEL FIDEICOMITENTE

El FIDEICOMITENTE reconoce que LA FIDUCIARIA acuerda y suscribe el presente CONTRATO bajo el entendimiento de que las siguientes declaraciones proporcionadas por el FIDEICOMITENTE son válidas, exactas y verdaderas en la fecha de suscripción del presente CONTRATO. Por lo tanto, el FIDEICOMITENTE declara y asevera a LA FIDUCIARIA que, en la fecha de suscripción del presente CONTRATO:

5.1. Es una sociedad anónima abierta debidamente establecida según las LEYES APLICABLES; y que sus representantes cuentan con todos los poderes y autorizaciones otorgados para celebrar y cumplir con todos los términos y condiciones del CONTRATO. Asimismo, el FIDEICOMITENTE tiene la capacidad legal para celebrar y comprometerse en los términos del presente CONTRATO.

5.2. Conoce los alcances y régimen legal vigente del presente CONTRATO, regulado en los artículos 241°, 274° y siguientes de la LEY DE BANCOS y del REGLAMENTO. Asimismo, el FIDEICOMITENTE ha adoptado todos los acuerdos societarios requeridos para celebrar el presente CONTRATO y constituir válidamente el PATRIMONIO FIDEICOMETIDO.

5.3. La celebración del presente CONTRATO y el cumplimiento de las obligaciones que este le impone se encuentran dentro de sus facultades estatutarias y no infringen: (i) su estatuto social; (ii) ninguna LEY APLICABLE; (iii) ninguna orden, sentencia, resolución o laudo de cualquier tribunal u otra dependencia judicial, administrativa

Fideicomiso N° 1339 Página 17 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

o arbitral que le sea aplicable y le haya sido notificada; ni, (iv) ningún contrato, hipoteca, garantía mobiliaria, instrumento u otro compromiso legalmente obligatorio que le resulte aplicable y del cual sea parte.

5.4. El CONTRATO no requiere para su validez y eficacia de la intervención, aceptación ni convalidación de persona o entidad alguna adicional a los suscriptores del presente CONTRATO, para los efectos de perfeccionar la transferencia en dominio fiduciario de los BIENES FIDEICOMETIDOS al PATRIMONIO FIDEICOMETIDO.

5.5. Es titular exclusivo y pacífico de los BIENES FIDEICOMETIDOS que aporta al PATRIMONIO FIDEICOMETIDO (según la descripción de las definiciones señaladas en la Cláusula Segunda), y tiene libre y pleno derecho de disposición sobre los mismos y estos se encuentran libres de cargas y gravámenes, prohibiciones o afectaciones de ningún tipo, ni medida judicial o extrajudicial que pudiera impedir su transferencia al PATRIMONIO FIDEICOMETIDO, salvo por la PRENDA EXISTENTE (la cual deberá ser levantada por el FIDEICOMITENTE según lo señalado en la Cláusula Tercera Adicional), y las prendas sin desplazamiento de primer y segundo grado sobre acciones en favor del FIDEICOMISARIO.

5.6. No tiene pendiente ningún reclamo, litigio o controversia judicial, arbitral o procedimiento administrativo, ni tiene CONOCIMIENTO de ningún reclamo, litigio o controversia judicial, arbitral o procedimiento administrativo inminente, que pudiere: (i) impedir o afectar su capacidad para transferir los BIENES FIDEICOMETIDOS al PATRIMONIO FIDEICOMETIDO; o, (ii) afectar la legalidad, validez, eficacia o ejecutabilidad del presente CONTRATO.

5.7. Conoce que, como consecuencia de la transferencia fiduciaria que se produce en virtud del CONTRATO, estará imposibilitado de efectuar actos de disposición, constituir garantías y -en general- afectar en modo alguno los bienes y derechos que conforman el PATRIMONIO FIDEICOMETIDO, sin la autorización previa y participación de LA FIDUCIARIA.

5.8. A la fecha de suscripción del presente CONTRATO, no mantiene obligaciones tributarias, formales o sustanciales vinculadas a los BIENES FIDEICOMETIDOS frente a las AUTORIDADES GUBERNAMENTALES, sean estas adscritas al gobierno central, regional o local, referidas a cualquiera de los bienes que conforman el PATRIMONIO FIDEICOMETIDO.

5.9. Ni el FIDEICOMITENTE ni las personas que forman parte de su grupo económico -de acuerdo a la definición contenida en el Reglamento de Propiedad Indirecta, Vinculación y Grupos Económicos, aprobado mediante Resolución SMV N° 019-2015-SMV-01 (conforme éste sea modificado en el tiempo) (en adelante, el “Grupo G&M”)- ni cualquiera de los directores, gerentes, funcionarios, empleados o representantes legales del FIDEICOMITENTE:

(i) han pagado, entregado, recibido u ofrecido, o intentado pagar, entregar, recibir u ofrecer un pago ilegal o cualquier otro tipo de estímulo económico, ventaja o beneficio ilegal presente o futuro, a un funcionario público o una persona que pueda razonablemente influir en un funcionario público, relacionado con cualquier acto, de cualquier clase, que esté referido a la contratación o eventual contratación por el FIDEICOMITENTE y/o las empresas del Grupo G&M con el Estado peruano;

Fideicomiso N° 1339 Página 18 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

(ii) respecto de los actos indicados en el apartado (i) precedente: (1) han sido condenados, mediante cualquier sentencia condenatoria emitida por el órgano respectivo del Poder Judicial-aunque ésta no sea firme-; (2) han sido suspendidos o inhabilitados en sus funciones por alguna AUTORIDAD COMPETENTE o si alguna AUTORIDAD COMPETENTE les hubiese suspendido o retirado la licencia para ejercer su profesión, en todos los casos, con decisión que haya quedado firme; o, (3) han sido sancionados administrativamente por alguna AUTORIDAD COMPETENTE con decisión que haya quedado firme; o,

(iii) han reconocido ante cualquier autoridad nacional o del extranjero cualquiera de los actos indicados en el apartado (i) precedente.

5.10. Declara haber sido adecuadamente informado y tener pleno conocimiento del alcance legal de las comisiones, costos, gastos, tasas, penalidades y, en general, de toda la información pertinente que haya solicitada y brindada por LA FIDUCIARIA de acuerdo a las LEYES APLICABLES y a lo regulado por el presente CONTRATO; y, en ese sentido, el FIDEICOMITENTE declara que LA FIDUCIARIA ha cumplido con brindarle toda la información requerida a la suscripción del CONTRATO, encontrándose conforme con los términos y condiciones de la misma.

Sin perjuicio de lo antes señalado, el FIDEICOMITENTE declara y reconoce que LA FIDUCIARIA no brinda servicios de asesoría legal, tributaria, contable y/o financiera, por lo que su decisión de suscribir el presente CONTRATO obedece al análisis individual realizado respecto de sus propias características, así como a la asesoría que pudieran haber recibido de sus asesores en materia legal, tributaria, contable y/o financiera.

SEXTA: TRANSFERENCIA EN DOMINIO FIDUCIARIO

6.1 Desde la suscripción del presente CONTRATO, el FIDEICOMITENTE transfiere irrevocablemente a favor de LA FIDUCIARIA, el dominio fiduciario sobre los BIENES FIDEICOMETIDOS en las condiciones y para los fines que se estipulan en el presente CONTRATO, sujeto al cumplimiento de la CONDICIÓN SUSPENSIVA DIVIDENDOS ADEXUS y la CONDICIÓN SUSPENSIVA VENTA ADEXUS, según corresponda.

6.2 Queda precisado que la transferencia en dominio fiduciario que realiza el FIDEICOMITENTE a favor de LA FIDUCIARIA, incluye todo aquello que de hecho o por derecho corresponda a los BIENES FIDEICOMETIDOS; por lo que, desde la fecha de suscripción del presente CONTRATO, LA FIDUCIARIA es quien tendrá la calidad de titular del dominio fiduciario sobre los mismos, con pleno derecho de administración, uso, disposición y reivindicación, dentro de los alcances y límites señalados en el presente CONTRATO y en la LEY DE BANCOS.

6.3 El dominio fiduciario sobre el PATRIMONIO FIDEICOMETIDO será ejercido por LA FIDUCIARIA a partir de la suscripción del presente CONTRATO. No obstante, la administración de los FLUJOS DINERARIOS DIVIDENDOS se efectuará a partir del

Fideicomiso N° 1339 Página 19 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

momento en que se canalicen los mismos a través de las CUENTAS RECAUDADORAS, y la de los FLUJOS DINERARIOS VENTA ADEXUS a partir del momento en que se canalicen los mismos a través de la CUENTA TRANSITORIA.

6.4 LA FIDUCIARIA manifiesta su aceptación en asumir el dominio fiduciario y ejercer todos los actos necesarios sobre el PATRIMONIO FIDEICOMETIDO para cumplir la finalidad del presente CONTRATO. Conforme con y en los supuestos establecidos en la Cláusula Vigésimo Primera del presente CONTRATO, LA FIDUCIARIA deberá ejercer la representación y defensa del PATRIMONIO FIDEICOMETIDO.

6.5 El FIDEICOMITENTE se obliga a suscribir toda la documentación –pública y/o privada- y realizar todas las gestiones a su cargo que sean útiles o necesarias para formalizar la transferencia fiduciaria de los BIENES FIDEICOMETIDOS al PATRIMONIO FIDEICOMETIDO.

6.6 Las PARTES dejan expresa constancia de que es responsabilidad del FIDEICOMITENTE y del DEPOSITARIO realizar las labores y gestiones de cobranza y la correcta canalización de los FLUJOS DINERARIOS DIVIDENDOS a través de las CUENTAS RECAUDADORAS, y de los FLUJOS DINERARIOS VENTA ADEXUS a través de la CUENTA TRANSITORIA, en todo momento a partir de la suscripción del presente CONTRATO.

En consecuencia, LA FIDUCIARIA no será responsables de que los BIENES FIDEICOMETIDOS sean debidamente canalizados en su integridad a través de las CUENTAS DEL FIDEICOMISO. Sin perjuicio de lo anterior, LA FIDUCIARIA podrá ejercer el dominio fiduciario y defensa del PATRIMONIO FIDEICOMETIDO, conforme a lo establecido en la Cláusula Vigésimo Primera de este CONTRATO, para que se produzca la recaudación efectiva y total de dichos recursos.

SÉTIMA: PATRIMONIO FIDEICOMETIDO

Las PARTES acuerdan regular diversos aspectos vinculados al PATRIMONIO FIDEICOMETIDO, tal como se señala a continuación:

7.1. DERECHOS DE COBRO DIVIDENDOS y FLUJOS DINERARIOS DIVIDENDOS:

7.1.1. El FIDEICOMITENTE deberá causar que los FLUJOS DINERARIOS DIVIDENDOS sean depositados por las SOCIEDADES EMISORAS y ADEXUS, según corresponda, en las CUENTAS RECAUDADORAS.

Los DERECHOS DE COBRO DIVIDENDOS son incorporados al PATRIMONIO FIDEICOMETIDO con la suscripción del presente CONTRATO (salvo por lo señalado en el párrafo siguiente), y sin perjuicio de las comunicaciones que deban cursarse a las SOCIEDADES EMISORAS y ADEXUS según los términos previstos en este documento, bajo responsabilidad del FIDEICOMITENTE. Los FLUJOS DINERARIOS DIVIDENDOS que se generen con posterioridad a la celebración del presente CONTRATO se incorporarán al PATRIMONIO FIDEICOMETIDO desde el momento en que existan.

Fideicomiso N° 1339 Página 20 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

Se deja constancia que, única y exclusivamente respecto de las ACCIONES ADEXUS GRAVADAS, los DERECHOS DE COBRO DIVIDENDOS ADEXUS y los FLUJOS DINERARIOS DIVIDENDOS ADEXUS son incorporados al PATRIMONIO FIDEICOMETIDO con la suscripción del presente CONTRATO, sujeto al cumplimiento de la CONDICION SUSPENSIVA DIVIDENDOS ADEXUS.

7.1.2. En caso el FIDEICOMITENTE no cumpliera con causar que las SOCIEDADES EMISORAS y/o ADEXUS, según corresponda, depositen los FLUJOS DINERARIOS DIVIDENDOS, dentro del plazo señalado en el numeral 10.10 del presente Contrato, originando un retraso en la percepción de los mismos, el FIDEICOMITENTE se obliga a: (i) dar inmediato aviso a LA FIDUCIARIA sobre dicha situación; e, (ii) iniciar o causar que se inicien las acciones judiciales o extrajudiciales o cualquier otra acción necesaria para que se produzca la recaudación efectiva y total de dichos recursos. El costo de llevar adelante los procesos judiciales o extrajudiciales o cualquier otra acción necesaria para que se produzca la recaudación efectiva de los citados flujos serán atendidos de acuerdo a lo dispuesto en la Cláusula Vigésimo Segunda del presente CONTRATO.

Los FLUJOS DINERARIOS DIVIDENDOS recaudados como consecuencia de los procesos judiciales o extrajudiciales o cualquier otra acción necesaria para que se produzca la recaudación efectiva de estos formarán parte del PATRIMONIO FIDEICOMETIDO. En tal sentido, el FIDEICOMITENTE se obliga a instruir a las SOCIEDADES EMISORAS y/o ADEXUS, según corresponda, así como a las AUTORIDADES GUBERNAMENTALES, a causar que se depositen los FLUJOS DINERARIOS DIVIDENDOS en las CUENTAS RECAUDADORAS.

7.1.3. Queda claramente establecido por las PARTES que, en el eventual caso que, por cualquier razón, las SOCIEDADES EMISORAS y/o ADEXUS depositen los FLUJOS DINERARIOS DIVIDENDOS en cuentas bancarias distintas a las CUENTAS RECAUDADORAS, el DEPOSITARIO y el FIDEICOMITENTE se encontrarán obligados solidariamente a depositar o transferir los FLUJOS DINERARIOS DIVIDENDOS a las CUENTAS RECAUDADORAS de acuerdo a lo establecido en los numerales 7.4.1 y 7.4.2 de la Cláusula Séptima del presente CONTRATO.

7.2. De las comunicaciones de transferencia en dominio fiduciario a las SOCIEDADES EMISORAS y a ADEXUS:

7.2.1. Para efectos de lo dispuesto en el artículo 1215° del Código Civil peruano, la transferencia en dominio fiduciario sobre los (i) DERECHOS DE COBRO DIVIDENDOS; (ii) FLUJOS DINERARIOS GMP; (iii) FLUJOS DINERARIOS DIVIDENDOS ADEXUS, será comunicada por el FIDEICOMITENTE y LA FIDUCIARIA a GMP o ADEXUS, según corresponda, a través de una comunicación escrita, sustancialmente de acuerdo al modelo de carta del ANEXO 5 – A del presente CONTRATO. Para el caso de la comunicación a ser enviada a GMP, la misma deberá ser enviada por conducto notarial.

Fideicomiso N° 1339 Página 21 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

En virtud de la comunicación antes mencionada, se informará a (A) GMP que: (i) los DERECHOS DE COBRO GMP y LOS FLUJOS DINERARIOS GMP han sido transferidos al PATRIMONIO FIDEICOMETIDO; y, (ii) se le instruirá de manera irrevocable a que se depositen directamente los importes que correspondan ser pagados al FIDEICOMITENTE por dichos conceptos en la CUENTA RECAUDADORA, correspondiente, o mediante cheque no negociable girado a la orden de la CUENTA RECAUDADORA, correspondiente, administrada por LA FIDUCIARIA; y, (B) ADEXUS que: (i) los DERECHOS DE COBRO DIVIDENDOS ADEXUS y los FLUJOS DINERARIOS DIVIDENDOS ADEXUS, han sido transferidos al PATRIMONIO FIDEICOMETIDO, sujeto, para el caso de, únicamente, las ACCIONES ADEXUS GRAVADAS al cumplimiento de la CONDICIÓN SUSPENSIVA DIVIDENDOS ADEXUS; y, (ii) se le instruirá de manera irrevocable que se depositen directamente los importes que correspondan ser pagados al FIDEICOMITENTE por dichos conceptos en la CUENTA RECAUDADORA, correspondiente, o mediante cheque no negociable girado a la orden de la CUENTA RECAUDADORA, correspondiente, administrada por LA FIDUCIARIA, sujeto, para el caso de, únicamente, los FLUJOS DINERARIOS DIVIDENDOS ADEXUS respecto de las ACCIONES GRAVADAS, a que LA FIDUCIARIA le hubiese comunicado el cumplimiento de la CONDICIÓN SUSPENSIVA DIVIDENDOS ADEXUS.

7.2.2. El FIDEICOMITENTE se obliga a causar que GMP incluya en su Libro de Matrícula de Acciones y en los certificados de las ACCIONES GMP, durante toda la vigencia del CONTRATO, la siguiente leyenda:

“Los derechos a percibir dividendos declarados, distribuciones de utilidades y/o devoluciones de capital derivados de las acciones que mantiene Graña y Montero S.A.A. en GMP S.A., así como los flujos dinerarios correspondientes, han sido transferidos en dominio fiduciario a un patrimonio fideicometido administrado por La Fiduciaria S.A., denominado La Fiduciaria Fid. GYM Gramercy. En tal sentido, cualquiera de dichos beneficios que deba ser distribuido a favor de Graña y Montero S.A.A. por GMP S.A. deberá ser depositado en la cuenta que para tales efectos indique La Fiduciaria S.A.

Asimismo, Graña y Montero S.A.A. se obliga a (i) no transferir, gravar, ceder, traspasar o bajo cualquier medio disponer sus derechos a percibir los beneficios antes mencionados como titular de sus acciones en GMP S.A. a terceros sin la previa autorización de La Fiduciaria S.A.; y (ii) no transferir, gravar, ceder, traspasar o bajo cualquier medio disponer de sus acciones en GMP S.A.”

7.2.3. La transferencia en dominio fiduciario sobre los FLUJOS DINERARIOS NORVIAL y los FLUJOS DINERARIOS GYM FERROVÍAS será comunicada por el FIDEICOMITENTE y LA FIDUCIARIA a NORVIAL y a GYM FERROVÍAS a través de una instrucción irrevocable por conducto notarial, sustancialmente de acuerdo al modelo de carta del ANEXO 5 – B del presente CONTRATO.

Fideicomiso N° 1339 Página 22 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

En virtud de la instrucción irrevocable antes mencionada, se informará a NORVIAL y a GYM FERROVÍAS que: (i) los FLUJOS DINERARIOS NORVIAL y los FLUJOS DINERARIOS GYM FERROVÍAS respectivos han sido transferidos al PATRIMONIO FIDEICOMETIDO; y, (ii) se le instruirá irrevocablemente a depositar directamente los importes que correspondan ser pagados al FIDEICOMITENTE en la CUENTA RECAUDADORA correspondiente, o mediante cheque no negociable girado a la orden de la CUENTA RECAUDADORA correspondiente, administrada por LA FIDUCIARIA.

7.2.4. Asimismo, el FIDEICOMITENTE se obliga a causar lo siguiente:

(a) Que NORVIAL incluya en su Libro de Matrícula de Acciones y en los certificados de las ACCIONES NORVIAL, durante toda la vigencia del CONTRATO, la siguiente leyenda:

“Cualquier flujo dinerario derivado del pago de dividendos declarados, distribuciones de utilidades y/o devoluciones de capital que corresponda ser efectivamente distribuido a Graña y Montero S.A.A. como titular de las acciones que este mantiene en Norvial S.A. ha sido transferido en dominio fiduciario a un patrimonio fideicometido administrado por La Fiduciaria S.A., denominado La Fiduciaria Fid. GYM Gramercy. En tal sentido, dichos flujos dinerarios deberán ser depositados en la siguiente cuenta [*]. La cuenta antes mencionada no podrá variar sin la aprobación previa y por escrito de La Fiduciaria S.A.

Asimismo, Graña y Montero S.A.A. se obliga a (i) no transferir, gravar, ceder, traspasar o bajo cualquier medio disponer sus derechos a percibir los beneficios antes mencionados como titular de sus acciones en Norvial S.A a terceros sin la previa autorización de La Fiduciaria S.A. (salvo en caso de ejecución de los contratos de garantía mobiliaria sobre acciones clase A y clase B representativas del capital social de Norvial S.A., respectivamente, ambos celebrados con fecha 18 de junio de 2015); y (ii) no transferir, gravar, ceder, traspasar o bajo cualquier medio disponer de sus acciones en Norvial S.A. (salvo en caso de ejecución de los contratos de garantía mobiliaria sobre acciones clase A y clase B representativas del capital social de Norvial S.A., respectivamente, ambos celebrados con fecha 18 de junio de 2015).”

(b) Que GYM FERROVÍAS incluya en su Libro de Matrícula de Acciones y en los certificados de las ACCIONES GYM FERROVÍAS, durante toda la vigencia del CONTRATO, la siguiente leyenda:

“Cualquier flujo dinerario derivado del pago de dividendos declarados, distribuciones de utilidades y/o devoluciones de capital que corresponda ser efectivamente distribuido a Graña y Montero S.A.A. como titular de las acciones que este mantiene en GyM Ferrovias S.A. ha sido transferido en dominio fiduciario a un

Fideicomiso N° 1339 Página 23 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

patrimonio fideicometido administrado por La Fiduciaria S.A., denominado La Fiduciaria Fid. GYM Gramercy. En tal sentido, dichos flujos dinerarios deberán ser depositados en la siguiente cuenta [*]. La cuenta antes mencionada no podrá variar sin la aprobación previa y por escrito de La Fiduciaria S.A.

Asimismo, Graña y Montero S.A.A. se obliga a (i) no transferir, gravar, ceder, traspasar o bajo cualquier medio disponer sus derechos a percibir los beneficios antes mencionados como titular de sus acciones en GyM Ferrovias S.A. a terceros sin la previa autorización de La Fiduciaria S.A. (salvo en caso de ejecución del contrato de garantía mobiliaria sobre acciones representativas del capital social de GYM Ferrovías S.A., celebrado con fecha 09 de febrero de 2015); y (ii) no transferir, gravar, ceder, traspasar o bajo cualquier medio disponer de sus acciones en GyM Ferrovias S.A. (salvo en caso de ejecución del contrato de garantía mobiliaria sobre acciones representativas del capital social de GYM Ferrovías S.A., celebrado con fecha 09 de febrero de 2015).

7.2.5. Al DÍA HÁBIL siguiente de abiertas las CUENTAS RECAUDADORAS, LA FIDUCIARIA preparará las comunicaciones indicadas en los numerales 7.2.1 y 7.2.3 precedente, y se las enviará al FIDEICOMITENTE para su firma, salvo por la comunicación a ser remitida a ADEXUS (de conformidad con el numeral 7.2.1) la cual será preparada directamente por el FIDEICOMITENTE y enviada a ADEXUS directamente dentro del plazo de un (1) DIA HABIL desde abiertas las CUENTAS RECAUDADORAS.

7.2.6. El FIDEICOMITENTE, dentro del DÍA HÁBIL siguiente de recibidas las comunicaciones a ser remitidas a las SOCIEDADES EMISORAS, deberá suscribir dichas comunicaciones y enviarlas a LA FIDUCIARIA a efectos de que LA FIDUCIARIA las firme y coordine el envío de las mismas conforme a lo señalado en los numerales 7.2.1 y 7.2.3 precedentes. LA FIDUCIARIA deberá coordinar el envío notarial de las comunicaciones a las SOCIEDADES EMISORAS dentro del DÍA HÁBIL siguiente de recibidas conforme a lo antes señalado.

7.2.7. Si dentro de los plazos mencionados en los numerales 7.2.5 y 7.2.6 anteriores, el FIDEICOMITENTE no cumple con enviar las comunicaciones firmadas a LA FIDUCIARIA o a ADEXUS (según corresponda), LA FIDUCIARIA se encontrará facultada para enviarlas directamente a GMP, GYM FERROVÍAS, NORVIAL y ADEXUS, sin la intervención del FIDEICOMITENTE, y por el solo mérito de haber suscrito el presente CONTRATO.

7.2.8. Las comunicaciones remitidas a las SOCIEDADES EMISORAS y ADEXUS tendrán el carácter de irrevocable para el FIDEICOMITENTE, por lo que no podrá ser variadas ni dejada sin efecto por este, salvo que cuente con la autorización previa y por escrito de LA FIDUCIARIA y el FIDEICOMISARIO.

Fideicomiso N° 1339 Página 24 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

7.2.9. Se deja constancia que cualquier gasto que origine el envío de las mencionadas comunicaciones serán atendidos de conformidad con lo dispuesto en la Cláusula Vigésima Segunda del presente CONTRATO.

7.2.10. El FIDEICOMITENTE deberá enviar a LA FIDUCIARIA, dentro de los dos (2) DÍAS HÁBILES de que LA FIDUCIARIA coordine el envío de las comunicaciones a las SOCIEDADES EMISORAS, así como desde el envío correspondiente por parte del FIDEICOMITENTE a ADEXUS, conforme a los numerales anteriores, (i) constancia de recepción de dichas cartas; y (ii) una copia certificada de los Libros de Matrícula de Acciones de las SOCIEDADES EMISORAS en las que consten insertas las leyendas indicadas en los numerales 7.2.2, 7.2.4(a) y 7.2.4 (b) precedentes. Asimismo, dentro del mismo plazo, el FIDEICOMITENTE deberá enviar a LA FIDUCIARIA una copia certificada por Notario de los certificados de acciones emitidos por las SOCIEDADES EMISORAS en las que consten insertas las leyendas anteriormente mencionadas.

7.2.11. El FIDEICOMITENTE se obliga a causar y cumplir todas las disposiciones que sean necesarias de acuerdo a la normativa de Chile, a los fines de que las obligaciones establecidas en los numerales anteriores en relación con los DERECHOS DE COBRO DIVIDENDOS ADEXUS y FLUJOS DINERARIOS DIVIDENDOS ADEXUS sean válidas y exigibles. En tal sentido, en caso de que alguna de las obligaciones establecidas en los numerales anteriores no sea aplicable bajo la normativa de Chile, el FIDEICOMITENTE se obliga a realizar cualquier acto similar ajustado a ley, que pudiere generar el mismo efecto o un efecto similar, con la previa autorización del FIDEICOMISARIO y LA FIDUCIARIA.

7.3. Declaración Jurada y Auditorías:

7.3.1 Durante los primeros tres (3) meses calendario del cada año, el FIDEICOMITENTE se obliga a remitir al FIDEICOMISARIO, una declaración jurada indicando que los FLUJOS DINERARIOS DIVIDENDOS se han canalizado de manera correcta y total a través de las CUENTAS RECAUDADORAS.

7.3.2 En caso: (i) el FIDEICOMITENTE no cumpla con remitir la declaración jurada dentro del plazo señalado en el párrafo precedente, y ante la solicitud del FIDEICOMISARIO; (ii) ocurra y se mantenga un EVENTO DE INCUMPLIMIENTO, y ante la solicitud del FIDEICOMISARIO; o (ii) ante la mera solicitud del FIDEICOMISARIO, sin necesidad que se haya verificado ninguno de los eventos descritos en los literales (i) y/o (ii) anteriores, el FIDEICOMITENTE deberá solicitar a sus auditores externos para que se pronuncie respecto de la correcta canalización de la totalidad de los FLUJOS DINERARIOS DIVIDENDOS a través de las CUENTAS RECAUDADORAS.

7.3.3 No obstante lo indicado, en caso que: (i) el FIDEICOMITENTE no cumpla con solicitar a sus auditores el pronunciamiento antes señalado, de acuerdo a lo establecido en el numeral 7.3.2 anterior; y/o, (ii) dicho informe no contemplara el pronunciamiento del auditor externo respecto de la

Fideicomiso N° 1339 Página 25 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

correcta canalización de los FLUJOS DINERARIOS DIVIDENDOS a través de las CUENTAS RECAUDADORAS; LA FIDUCIARIA, según sea instruido por el FIDEICOMISARIO, podrá solicitar la realización de auditorías, conforme a lo establecido en los numerales siguientes.

7.3.4 En cada oportunidad en que se determine la necesidad de la realización de una auditoría conforme a lo dispuesto en la presente cláusula, LA FIDUCIARIA deberá requerir al FIDEICOMITENTE la designación de una de las EMPRESAS AUDITORAS señaladas en el ANEXO 6 del presente CONTRATO. El FIDEICOMITENTE contará con un plazo de cinco (5) DÍAS HÁBILES a efecto de comunicar a LA FIDUCIARIA el nombre de la Empresa Auditora a ser contratada. En caso contrario, LA FIDUCIARIA procederá a designar a la Empresa Auditora que considere conveniente, dentro de las indicadas en el ANEXO 6, sin asumir responsabilidad alguna por ello.

7.3.5 En caso las EMPRESAS AUDITORAS consignadas en el ANEXO 6 del presente CONTRATO, no estén prestando servicios de auditoría o no aceptaran el encargo que se les formule, el FIDEICOMISARIO propondrá al menos dos (2) EMPRESAS AUDITORAS de primer nivel al FIDEICOMITENTE quien deberá elegir a la Empresa Auditora a ser contratada conforme el procedimiento y plazo establecido en el párrafo inmediato anterior. En caso contrario, LA FIDUCIARIA designará, de la relación propuesta, a una (1) de las EMPRESAS AUDITORAS. En ningún caso LA FIDUCIARIA asumirá responsabilidad alguna por la designación ni por el resultado del trabajo realizado por las EMPRESAS AUDITORAS.

7.3.6 Los informes que emitan las EMPRESAS AUDITORAS serán remitidos, en copia simple, a LA FIDUCIARIA, al FIDEICOMISARIO y FIDEICOMITENTE.

7.3.7 Todos los gastos y costos que genere la realización de las auditorías serán asumidos por el FIDEICOMITENTE, de acuerdo a lo establecido en la Cláusula Vigésimo Segunda del CONTRATO.

7.4. DEPOSITARIO:

7.4.1 En el eventual caso que el FIDEICOMITENTE reciba directa o indirectamente los FLUJOS DINERARIOS, éste se encontrará obligado –a depositar los mismos en las CUENTAS RECAUDADORAS o CUENTA TRANSITORIA, según correspondan, a más tardar dentro de los dos (2) DÍAS HÁBILES siguiente de haberlos recibido

A tal efecto las PARTES, a propuesta del FIDEICOMITENTE, nombran como DEPOSITARIO de los FLUJOS DINERARIOS a la persona señalada en la introducción del presente CONTRATO, quien interviene en el presente CONTRATO a fin de aceptar el encargo de DEPOSITARIO a título gratuito, asumiendo las responsabilidades civiles y penales que conforme a las LEYES APLICABLES y al presente CONTRATO le corresponden. El DEPOSITARIO se mantendrá durante la vigencia del CONTRATO.

Fideicomiso N° 1339 Página 26 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

7.4.2 El DEPOSITARIO será responsable del depósito en las CUENTAS RECAUDADORAS o en la CUENTA TRANSITORIA, según corresponda, de los FLUJOS DINERARIOS que por cualquier motivo sean recaudados extraordinariamente por el FIDEICOMITENTE fuera de las cuentas antes indicadas, dentro de los dos (2) DÍAS HÁBILES siguiente de haberlos recibido, de acuerdo a lo establecido en el numeral 7.4.1 anterior.

7.4.3 El incumplimiento de las obligaciones contenidas en los numerales 7.4.1 y 7.4.2 anteriores, conllevará las responsabilidades civiles y penales que conforme a las LEYES APLICABLES y al presente CONTRATO le correspondan al FIDEICOMITENTE y al DEPOSITARIO. Ello sin perjuicio de que el incumplimiento de numerales 7.4.1 y 7.4.2 anteriores puedan ser considerado como un EVENTO DE INCUMPLIMIENTO.

7.4.4 El FIDEICOMITENTE podrá sustituir al DEPOSITARIO siempre que el nuevo depositario se desempeñe en un nivel de gerencia corporativa o director del FIDEICOMITENTE. Para tal efecto, el FIDEICOMITENTE deberá cursar una comunicación a LA FIDUCIARIA y al FIDEICOMISARIO indicando el nombre de la persona propuesta como depositario sustituto.

El FIDEICOMISARIO deberá comunicar al FIDEICOMITENTE – con copia a la FIDUCIARIA - su aprobación o rechazo al depositario sustituto en un plazo no mayor a quince (15) DÍAS HÁBILES de recibida la comunicación del FIDEICOMITENTE. En caso el FIDEICOMISARIO no remita la comunicación dentro del plazo establecido, se entenderá que el sustituto propuesto ha sido aprobado. Las PARTES acuerdan que el FIDEICOMISARIO no podrá rechazar al depositario sustituto propuesto de manera injustificada.

El nombramiento de un nuevo depositario surtirá efectos desde que el mismo sea aceptado por el FIDEICOMISARIO mediante la comunicación indicada en el párrafo anterior, y cumpla el nuevo depositario, con suscribir los documentos que pudieran ser requeridos por LA FIDUCIARIA a los efectos de dejar constancia de la recepción como nuevo depositario de los BIENES FIDEICOMETIDOS que conforman el PATRIMONIO FIDEICOMETIDO cuya custodia le corresponde.

7.5. Del CRONOGRAMA:

7.5.1 En caso el CRONOGRAMA sea modificado en el marco del CONTRATO DE PRÉSTAMO, ya sea por algún prepago o cualquiera otra causa, es de exclusiva responsabilidad del FIDEICOMISARIO comunicar a LA FIDUCIARIA, con copia al FIDEICOMITENTE, con una anticipación no menor a dos (2) DÍAS HÁBILES de la próxima FECHA DE PAGO CAPITAL y/o FECHA DE PAGO INTERESES, adjuntando copia del nuevo CRONOGRAMA. Dicha copia remplazará el ANEXO 1 del presente CONTRATO, sin necesidad de suscribir una adenda al presente CONTRATO.

7.5.2 LA FIDUCIARIA tomará como válido y vigente el último CRONOGRAMA que el FIDEICOMISARIO le haya entregado, y realizará la transferencia de la CUOTA CAPITAL y CUOTA INTERESES correspondientes de las CUENTAS RECAUDADORAS a la CUENTA DESTINO FIDEICOMISARIO según dicho CRONOGRAMA, sin asumir responsabilidad alguna por ello.

Fideicomiso N° 1339 Página 27 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

7.6. DERECHOS DE COBRO VENTA ADEXUS Y FLUJOS DINERARIOS VENTA ADEXUS:

7.6.1 Durante la vigencia del CONTRATO, el FIDEICOMITENTE podrá vender las acciones que posee en ADEXUS, de acuerdo a lo establecido en el CONTRATO DE PRÉSTAMO. En tal supuesto, el FIDEICOMISARIO tendrá plena disponibilidad para elegir si dichos flujos dinerarios son depositados en la CUENTA TRANSITORIA o directamente en la CUENTA DESTINO FIDEICOMISARIO u en otra cuenta bancaria que el FIDEICOMISARIO indique por escrito al FIDEICOMITENTE, con copia a LA FIDUCIARIA.

7.6.2 En caso el FIDEICOMISARIO señale que los FLUJOS DINERARIOS VENTA ADEXUS sean depositados en la CUENTA TRANSITORIA, el FIDEICOMITENTE deberá remitir una comunicación a LA FIDUCIARIA – con copia al FIDEICOMISARIO–solicitando que LA FIDUCIARIA, a su vez, solicite en el banco que sea indicado para dichos efectos por el FIDEICOMITENTE, previo acuerdo con el FIDEICOMISARIO y según los términos del presente CONTRATO, la apertura de la CUENTA TRANSITORIA.

7.6.3 De ser depositados los FLUJOS DINERARIOS VENTA ADEXUS en la CUENTA TRANSITORIA, éstos serán administrados por LA FIDUCIARIA de acuerdo a lo señalado en el numeral 8.6 de la Cláusula Octava del presente CONTRATO.

7.6.4 Asimismo, se deja constancia que los DERECHOS DE COBRO VENTA ADEXUS son incorporados al PATRIMONIO FIDEICOMETIDO con la suscripción del presente CONTRATO, sujeto al cumplimiento de la CONDICION SUSPENSIVA VENTA ADEXUS. Los FLUJOS DINERARIOS VENTA ADEXUS que se generen con posterioridad a la celebración del presente CONTRATO se incorporarán al PATRIMONIO FIDEICOMETIDO desde el momento en que existan (sujeto al cumplimiento de la CONDICION SUSPENSIVA VENTA ADEXUS). El FIDEICOMITENTE deberá informar a LA FIDUCIARIA y al FIDEICOMISARIO respecto de la fecha de generación efectiva de los FLUJOS DINERARIOS VENTA ADEXUS, y, una vez que reciba las instrucciones por parte del FIDEICOMISARIO de depositar tales flujos en la CUENTA TRANSITORIA, de ser el caso, el FIDEICOMITENTE deberá solicitar la apertura de dicha CUENTA TRANSITORIA con una anticipación no menor a cinco (5) DÍAS HÁBILES a la fecha en que dichos flujos serán efectivamente generados.

OCTAVA: CUENTAS DEL FIDEICOMISO

8.1. Apertura de las CUENTAS DEL FIDEICOMISO:

8.1.1. A fin de administrar los FLUJOS DINERARIOS DIVIDENDOS, LA FIDUCIARIA procederá a solicitar al BANCO la apertura de las CUENTAS RECAUDADORAS dentro de los dos (2) DÍAS HÁBILES siguientes a la celebración de este CONTRATO. Asimismo, LA FIDUCIARIA se compromete a hacer los

Fideicomiso N° 1339 Página 28 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

seguimientos y demás acciones correspondientes a fin que las CUENTAS RECAUDADORAS puedan ser efectivamente abiertas en el más breve plazo posible.

8.1.2. A fin de administrar los FLUJOS DINERARIOS VENTA ADEXUS, LA FIDUCIARIA procederá a solicitar al respectivo banco la apertura de la CUENTA TRANSITORIA, dentro de los dos (2) DÍAS HÁBILES de que sea solicitado por el FIDEICOMITENTE, de acuerdo con lo señalado en el numeral 7.6.4 de la Cláusula Séptima del presente CONTRATO. Asimismo, LA FIDUCIARIA se compromete a hacer los seguimientos y demás acciones correspondientes a fin que la CUENTA TRANSITORIA pueda ser efectivamente abierta en el más breve plazo posible.

8.1.3. Una vez abiertas las CUENTAS DEL FIDEICOMISO, LA FIDUCIARIA comunicará dentro del DÍA HÁBIL siguiente los números de las referidas cuentas al FIDEICOMITENTE y al FIDEICOMISARIO.

8.2. Administración de las CUENTAS RECAUDADORAS:

8.2.1. Desde la apertura de las CUENTAS RECAUDADORAS el cien por ciento (100%) de los FLUJOS DINERARIOS DIVIDENDOS serán abonados por las SOCIEDADES EMISORAS que correspondan y ADEXUS, de ser el caso, en las CUENTAS RECAUDADORAS.

8.2.2. En cada FECHA DE PAGO CAPITAL, FECHA DE PAGO INTERESES o cualquier otra fecha en la que corresponda un pago de acuerdo con la COMUNICACIÓN DE PAGO, según corresponda, LA FIDUCIARIA transferirá los FLUJOS DINERARIOS DIVIDENDOS o el DEPÓSITO FIDEICOMITENTE, según corresponda, acreditados en las CUENTAS RECAUDADORAS como a continuación se detalla:

(i) En primer lugar, para cubrir los tributos que se generen con relación a los BIENES FIDEICOMETIDOS que conforman el PATRIMONIO FIDEICOMETIDO, producto de la administración de este último por LA FIDUCIARIA de acuerdo al CONTRATO (dejándose expresa constancia que el concepto de tributos previsto en esta prelación no incluye el Impuesto General a las Ventas ni el Impuesto a la Renta que corresponda pagar al FIDEICOMITENTE y/o el FIDEICOMISARIO con relación a los FLUJOS DINERARIOS).

(ii) En segundo lugar, para cubrir los gastos y costos que se generen como consecuencia de la constitución, administración y defensa del PATRIMONIO FIDEICOMETIDO, de acuerdo con lo establecido en la Cláusula Vigésimo Segunda de este CONTRATO.

(iii) En tercer lugar, para cubrir la retribución que se pudiere estar adeudando a LA FIDUCIARIA, conforme a señalado en la Cláusula Décimo Cuarta del presente CONTRATO.

Fideicomiso N° 1339 Página 29 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

(iv) En cuarto lugar, para transferir de la CUENTA RECAUDADORA en DÓLARES a la CUENTA DESTINO FIDEICOMISARIO el monto correspondiente a la CUOTA INTERESES y/o CUOTA CAPITAL que corresponda ser pagada de acuerdo a lo señalado en el CRONOGRAMA, o cualquier otro monto que corresponda ser pagado de acuerdo a lo indicado en la COMUNICACIÓN DE PAGO (es decir, un prepago (voluntario u obligatorio) o cualquier otro pago exigible y pagadero bajo los DOCUMENTOS DEL PRÉSTAMO), de ser el caso.

(v) En quinto lugar y, sólo en caso se haya alcanzado a cubrir, bajo las CUENTAS RECAUDADORAS, los importes referidos en el numeral anterior, el remanente será transferido a la CUENTA DESTINO FIDEICOMITENTE.

8.2.3. En un plazo no menor a quince (15) DÍAS HÁBILES antes de cada FECHA DE PAGO CAPITAL y FECHA DE PAGO INTERESES, o en un plazo no menor a tres (3) DÍAS HÁBILES antes de la fecha en que los pagos instruidos en la COMUNICACIÓN DE PAGO deban realizarse, LA FIDUCIARIA verificará el saldo existente y disponible en las CUENTAS RECAUDADORAS, según corresponda, a efectos de verificar si los fondos son suficientes para atender el pago de la respectiva CUOTA INTERESES o CUOTA CAPITAL próxima a vencer en la CUENTA DESTINO FIDEICOMISARIO y/o del importe que corresponda ser pagado de acuerdo a lo indicado en la COMUNICACIÓN DE PAGO. Para tales fines y considerando que todos los pagos deben ser cancelado en DÓLARES, si los fondos acreditados en la CUENTA RECAUDADORA en DÓLARES no son suficientes, LA FIDUCIARIA deberá convertir a DÓLARES, conforme se indica en el presente CONTRATO, los fondos acreditados en la CUENTA RECAUDADORA en SOLES y transferirlos a la CUENTA RECAUDADORA en DÓLARES a efectos de atender los pagos antes indicados. Las operaciones de tipo de cambio se realizarán conforme a lo señalado en el numeral 8.7.7 de la presente cláusula.

8.2.4. Una vez verificados los saldos de las CUENTAS RECAUDADORAS conforme al numeral 8.2.3 anterior, los fondos destinados a los pagos mencionados en tal numeral que se encuentren debidamente depositados en la CUENTA RECAUDADORA en DÓLARES, no podrán ser usados para ningún fin distinto al pago de tales pagos en los plazos y términos indicados en el CONTRATO y el CONTRATO DE PRÉSTAMO, salvo autorización por escrito del FIDEICOMISARIO. En ese sentido, cualquier instrucción distinta enviada por el FIDEICOMITENTE sin la aprobación por escrito del FIDEICOMISARIO (la cual podrá ser denegado a su sola discreción) carecerá de efecto alguno.

8.2.5. En la oportunidad de verificación que corresponda conforme al numeral 8.2.3, si los fondos acreditados en la CUENTA RECAUDADORA en DÓLARES no son suficientes para completar o pagar las obligaciones que correspondan según lo antes señalado, LA FIDUCIARIA deberá comunicar de inmediato de tal circunstancia al FIDEICOMITENTE –con copia al FIDEICOMISARIO- solicitándole cumpla con: (i) causar que las SOCIEDADES EMISORAS depositen dentro de los dos (2) DÍAS HÁBILES siguientes de haber recibido dicha comunicación, los fondos suficientes para cubrir la

Fideicomiso N° 1339 Página 30 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

CUOTA CAPITAL, CUOTA INTERESES y/o el pago indicado en la COMUNICACIÓN DE PAGO, depositando los mismos en la CUENTA RECAUDADORA en DÓLARES; o, (ii) atender, dentro del mismo plazo de dos (2) DÍAS HÁBILES, directamente el pago de la CUOTA CAPITAL, CUOTA INTERESES y/u el pago indicado en la COMUNICACIÓN DE PAGO, según corresponda, con recursos propios.

Se deja constancia que, en el caso indicado en el numeral (ii) anterior, LA FIDUCIARIA no será responsable por el pago oportuno de la CUOTA CAPITAL, CUOTA INTERESES y/o demás obligaciones correspondientes, debiendo el FIDEICOMITENTE remitir a LA FIDUCIARIA en un plazo de tres (3) DÍAS HÁBILES de haberse efectuado el pago, el comprobante de pago donde se establezca la oportuna cancelación de la CUOTA CAPITAL, CUOTA INTERESES y/u obligaciones correspondientes.

Asimismo, se deja expresa constancia que, en ningún caso LA FIDUCIARIA asume o asumirá responsabilidad alguna en caso que los FLUJOS DINERARIOS acreditados en las CUENTAS RECAUDADORAS no sean suficientes para atender el pago de la CUOTA CAPITAL, CUOTA INTERESES y/demás obligaciones conforme a la presente cláusula, siendo dicha obligación responsabilidad exclusiva del FIDEICOMITENTE.

8.2.6. Asimismo, las PARTES acuerdan que los montos que deban ser depositados en la CUENTA DESTINO FIDEICOMISARIO, deberán ser depositados en DÓLARES, y en la cantidad suficiente de dicha moneda que sean necesarios para cubrir el íntegro de la CUOTA CAPITAL, CUOTA INTERESES y/o demás obligaciones de pago conforme a la presente cláusula, para lo cual la FIDUCIARIA realizará, de ser necesario, la conversión de SOLES a DÓLARES conforme a lo establecido en el numeral 8.7.7 y demás términos del presente CONTRATO.

8.3. Envío de una NOTIFICACIÓN DE INCUMPLIMIENTO:

8.3.1. En caso el FIDEICOMISARIO remita a LA FIDUCIARIA una NOTIFICACIÓN DE INCUMPLIMIENTO en la que el FIDEICOMISARIO comunique que se ha producido un EVENTO DE INCUMPLIMIENTO, LA FIDUCIARIA, sin asumir responsabilidad y sin requerir autorización ni formalidad previa de ningún tipo, procederá –sin admitir oposición alguna del FIDEICOMITENTE ni de ningún tercero, que de presentarse se considerarán como no presentadas-, a retener hasta el cien por ciento (100%) de los FLUJOS DINERARIOS DIVIDENDOS, acreditados o que se acrediten en las CUENTAS RECAUDADORAS, sin que se realice ninguna liberación de FLUJOS DINERARIOS DIVIDENDOS a favor del FIDEICOMITENTE.

8.3.2. En tal sentido, desde el momento en que LA FIDUCIARIA reciba una NOTIFICACIÓN DE INCUMPLIMIENTO, LA FIDUCIARIA procederá a administrar las CUENTAS RECAUDADORAS según lo establecido en el numeral 8.2.2 (i) al 8.2.2 (iv) precedente (esto es, sin que procedan liberaciones de fondos a favor del FIDEICOMITENTE), hasta que el FIDEICOMISARIO remita una NOTIFICACIÓN DE CESE DE INCUMPLIMIENTO o una NOTIFICACIÓN DE ACELERACIÓN.

Fideicomiso N° 1339 Página 31 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

8.4. Envío de una NOTIFICACIÓN DE CESE DE INCUMPLIMIENTO:

En caso LA FIDUCIARIA reciba una NOTIFICACIÓN DE CESE DE INCUMPLIMIENTO, ésta procederá a suspender las retenciones indicadas en el numeral 8.3 precedente, debiendo LA FIDUCIARIA retomar la administración de las CUENTAS RECAUDADORAS y los FLUJOS DINERARIOS DIVIDENDOS acumulados en éstas, de conformidad con lo establecido en el numeral 8.2 de la presente cláusula. Asimismo, la administración de la CUENTA TRANSITORIA y de los FLUJOS DINERARIOS VENTA ADEXUS se administrarán conforme a lo señalado en el numeral 8.6 del presente CONTRATO.

8.5. Envío de una NOTIFICACIÓN DE ACELERACIÓN:

En caso el FIDEICOMISARIO remita a LA FIDUCIARIA una NOTIFICACIÓN DE ACELERACIÓN, LA FIDUCIARIA, sin asumir responsabilidad y sin requerir autorización ni formalidad previa de ningún tipo, procederá -sin admitir oposición alguna del FIDEICOMITENTE ni de ningún tercero, que de presentarse se considerarán como no presentadas- a transferir a la CUENTA DESTINO FIDEICOMISARIO, los saldos acreditados en las CUENTAS RECAUDADORAS; y, de ser el caso, transferir a la CUENTA DESTINO FIDEICOMISARIO o a la cuenta que indique el FIDEICOMISARIO bajo una instrucción escrita, los saldos acreditados en la CUENTA TRANSITORIA; para la cancelación de las OBLIGACIONES GARANTIZADAS según corresponda, previo pago de los ítems (i), (ii) y (iii) del numeral 8.2.2 precedente.

Queda expresamente establecido que el FIDEICOMISARIO tendrá la potestad de enviar una NOTIFICACIÓN DE ACELERACIÓN sin haber previamente enviado una NOTIFICACIÓN DE INCUMPLIMIENTO, a su entera discreción.

Las Partes acuerdan que, los montos que deban ser depositados en la CUENTA DESTINO FIDEICOMISARIO deberán ser depositados en DÓLARES, y en la cantidad suficiente de dicha moneda que sean necesarios para cubrir el íntegro de las OBLIGACIONES GARANTIZADAS, para lo cual LA FIDUCIARIA realizará la conversión de SOLES a DÓLARES según los términos del presente CONTRATO, de ser necesario.

8.6. Administración de la CUENTA TRANSITORIA:

8.6.1. Dentro de los dos (2) DÍAS HÁBILES siguientes en que se realice el depósito de los FLUJOS DINERARIOS VENTA ADEXUS en la CUENTA TRANSITORIA, y dicho evento haya sido comunicado por el FIDEICOMITENTE a LA FIDUCIARIA, esta deberá transferir el íntegro de los FLUJOS DINERARIOS VENTA ADEXUS acreditados en la CUENTA TRANSITORIA, para ser utilizados como a continuación se detalla:

(i) En primer lugar, para cubrir los tributos que se generen con relación a los BIENES FIDEICOMETIDOS que conforman el PATRIMONIO FIDEICOMETIDO, producto de la administración de este último por LA

Fideicomiso N° 1339 Página 32 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

FIDUCIARIA de acuerdo al CONTRATO (dejándose expresa constancia que el concepto de tributos previsto en esta prelación no incluye el Impuesto General a las Ventas ni el Impuesto a la Renta que corresponda pagar al FIDEICOMITENTE y/o el FIDEICOMISARIO con relación a los FLUJOS DINERARIOS).

(ii) En segundo lugar, para cubrir los gastos y costos que se generen como consecuencia de la constitución, administración y defensa del PATRIMONIO FIDEICOMETIDO, de acuerdo con lo establecido en la Cláusula Vigésimo Segunda de este CONTRATO.

(iii) En tercer lugar, para cubrir la retribución que se pudiere estar adeudando a LA FIDUCIARIA, conforme a señalado en la Cláusula Décimo Cuarta del presente CONTRATO.

(iv) En cuarto lugar, a destinar los FLUJOS DINERARIOS VENTA ADEXUS a la CUENTA DESTINO FIDEICOMISARIO o la cuenta que indique el FIDEICOMISARIO bajo una instrucción escrita. Asimismo, las PARTES acuerdan que los montos que deban ser depositados en la CUENTA DESTINO FIDEICOMISARIO o aquella cuenta indicada por el FIDEICOMISARIO, deberán ser depositados en DÓLARES.

Luego de realizado ello, LA FIDUCIARIA solicitará al respectivo banco el cierre de la CUENTA TRANSITORIA.

8.7. Generalidades de las CUENTAS DEL FIDEICOMISO:

8.7.1. LA FIDUCIARIA podrá contratar -para el mejor desempeño de sus funciones- los servicios bancarios que sean necesarios para la adecuada administración del PATRIMONIO FIDEICOMETIDO brindados por el BANCO o aquellas otras entidades en las que se encuentren operando las CUENTAS DEL FIDEICOMISO. En atención a ello, LA FIDUCIARIA permitirá al FIDEICOMITENTE y al FIDEICOMISARIO -en tanto estos cuenten con este sistema- el acceso en consulta a la CUENTAS DEL FIDEICOMISO a través del respectivo sistema informático del banco correspondiente donde se encuentren abiertas las CUENTAS DEL FIDEICOMISO.

8.7.2. Las contraprestaciones por los servicios antes referidos, así como las remuneraciones de las CUENTAS DEL FIDEICOMISO, serán negociadas directamente por el FIDEICOMITENTE con el banco correspondiente, no siendo LA FIDUCIARIA responsable por dichas negociaciones.

8.7.3. Los gastos, portes, tributos o comisiones que se generen por la operación y mantenimiento de las CUENTAS DEL FIDEICOMISO, así como por las transferencias de fondos que se efectúen hacia y desde las mismas –incluyendo transferencias interbancarias- y los servicios bancarios contratados de conformidad con lo dispuesto en el párrafo anterior, serán atendidos de acuerdo a lo establecido en la Cláusula Vigésimo Segunda del presente CONTRATO.

Fideicomiso N° 1339 Página 33 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

8.7.4. Únicamente para efecto del Impuesto a las Transacciones Financieras (ITF) se considerará al FIDEICOMITENTE como titular de las CUENTAS DEL FIDEICOMISO.

8.7.5. De conformidad con lo establecido en el artículo 252° de la LEY DE BANCOS, LA FIDUCIARIA no requiere de poder especial para la administración del PATRIMONIO FIDEICOMETIDO. Consecuentemente, LA FIDUCIARIA se encuentra plenamente facultada para operar las CUENTAS DEL FIDEICOMISO pudiendo disponer de los fondos acreditados en la misma a través de transferencias bancarias o interbancarias o a través de la solicitud de cheques de gerencia con cargo a las CUENTAS DEL FIDEICOMISO, sin más limitaciones que las establecidas en el presente CONTRATO.

8.7.6. Las transferencias entre cuentas bancarias en distintas instituciones financieras que se encuentren en Perú serán realizadas mediante el Banco Central de Reserva (BCR). Las transferencias entre cuentas bancarias en distintas instituciones financieras que no se encuentre en Perú serán realizadas mediante transferencias SWIFT. Los gastos que generen las transferencias de fondos vía Banco Central de Reserva (BCR) y al extranjero vía SWIFT, y que resulten necesarios para la correcta administración del PATRIMONIO FIDEICOMETIDO serán atendidos de acuerdo a lo establecido en la Cláusula Vigésimo Segunda del presente CONTRATO.

8.7.7. En caso sea necesario realizar cambios de monedas con los FLUJOS DINERARIOS acreditados en las CUENTAS DEL FIDEICOMISO -ya sea de SOLES a DÓLARES o viceversa- a efecto de realizar las provisiones correspondientes a las diversas CUENTAS DEL FIDEICOMISO, o entre dichas cuentas, o para las transferencias a terceros según lo previsto en este CONTRATO, el FIDEICOMITENTE deberá negociar con el BANCO el tipo de cambio a ser aplicable, debiendo comunicar a LA FIDUCIARIA el resultado de dicha negociación hasta las diez (10) horas del mismo día a ser realizada la transacción.

Queda claramente establecido que LA FIDUCIARIA no será responsable por la negociación del tipo de cambio aplicable, siendo ello de entera responsabilidad del FIDEICOMITENTE. Las negociaciones deberán realizarse con la debida anticipación con la finalidad de cumplir con los plazos señalados en el presente CONTRATO; por lo que en caso en la fecha en la que corresponda administrar los FLUJOS DINERARIOS, de acuerdo a lo establecido en la Cláusula Octava, no se hayan realizado las coordinaciones correspondientes, LA FIDUCIARIA aplicará el tipo de cambio que corresponda a ese DÍA HÁBIL, de acuerdo a lo indicado por el BANCO, entidad en la cual se encuentran abiertas las CUENTAS DEL FIDEICOMISO.

NOVENA: OBLIGACIONES DE LA FIDUCIARIA

En virtud del presente instrumento, LA FIDUCIARIA se obliga a lo siguiente:

9.1. Solicitar la apertura de las CUENTAS DEL FIDEICOMISO a nombre del PATRIMONIO FIDEICOMETIDO en los plazos y oportunidades establecidas en el presente

Fideicomiso N° 1339 Página 34 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

CONTRATO, y a realizar todos aquellos actos que resulten razonablemente necesarios para lograr que dichas cuentas sean efectivamente abiertas en el más corto plazo posible.

9.2. Recibir en dominio fiduciario del FIDEICOMITENTE los BIENES FIDEICOMETIDOS, que conforman el PATRIMONIO FIDEICOMETIDO, según lo establecido en el presente CONTRATO.

9.3. Actuar de conformidad con lo indicado en el CONTRATO y con las instrucciones que le imparta el FIDEICOMITENTE y/o el FIDEICOMISARIO, de acuerdo a lo establecido en el CONTRATO; manteniéndolo informado sobre el desarrollo de sus actividades y de los gastos incurridos en el cumplimiento de sus actividades.

9.4. Dar inmediato aviso, a más tardar dentro del DÍA HÁBIL siguiente de ocurrido, al FIDEICOMITENTE y/o el FIDEICOMISARIO, de cualquier hecho o circunstancia de la que tuviere CONOCIMIENTO que afecte de cualquier manera al PATRIMONIO FIDEICOMETIDO o que amenace o perturbe sus derechos.

9.5. Realizar todas las gestiones necesarias a fin de que los BIENES FIDEICOMETIDOS sean transferidos a su favor en su condición de fiduciario, incluyendo las gestiones necesarias a efecto que se inscriba el CONTRATO en la Central de Riesgos de la SBS y que se publique la constitución del PATRIMONIO FIDEICOMETIDO en el Diario Oficial “El Peruano”. Asimismo, LA FIDUCIARIA supervisará la inscripción del CONTRATO, y de cualquier modificación a este, en el registro público respectivo.

9.6. Realizar, conforme a lo previsto en el numeral 7.3 de la Cláusula Sétima del presente CONTRATO, cuando corresponda las auditorías necesarias, con el objeto de verificar la correcta canalización de los FLUJOS DINERARIOS a través de las CUENTAS RECAUDADORAS, conforme a lo dispuesto en el CONTRATO.

9.7. Cumplir con el encargo y los fines del presente CONTRATO, realizando todos los actos necesarios, con la misma diligencia que tiene para sus negocios.

9.8. Asumir la defensa del PATRIMONIO FIDEICOMETIDO y realizar las actividades que se requieran para una adecuada defensa del PATRIMONIO FIDEICOMETIDO, de conformidad con lo establecido en la Cláusula Vigésimo Primera del presente CONTRATO, con el objeto de cautelar este y cualquiera de los derechos inherentes al mismo.

9.9. Realizar las gestiones de seguimiento del proceso de inscripción del presente CONTRATO en el Registro Mobiliario de Contratos, a ser realizada por FIDEICOMITENTE.

9.10. Mantener una clara separación entre el PATRIMONIO FIDEICOMETIDO y su propio patrimonio, siendo extensiva esta obligación a los demás bienes y derechos que en el futuro pudieran ser incorporados al PATRIMONIO FIDEICOMETIDO.

9.11. Presentar los estados financieros semestrales y memorias anuales del PATRIMONIO FIDEICOMETIDO a la SBS. La información será puesta a disposición de las PARTES a través de la extranet de LA FIDUCIARIA. Para el caso de los estados de cuenta, estos

Fideicomiso N° 1339 Página 35 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

serán remitidos una vez que los mismos sean recibidos por LA FIDUCIARIA. Para el caso de la memoria anual y los estados financieros de fin de año -conforme lo señalado en el artículo 10° del REGLAMENTO- las PARTES acuerdan que LA FIDUCIARIA podrá presentar los mismos dentro de los primeros noventa (90) días de cada año.

9.12. LA FIDUCIARIA permitirá al FIDEICOMITENTE y al FIDEICOMISARIO–en tanto estos cuenten con el sistema del BANCO– el acceso en consulta a las CUENTAS DEL FIDEICOMISO a través del respectivo sistema informático que brinde BANCO.

9.13. Guardar reserva sobre los actos y documentos relacionados con el PATRIMONIO FIDEICOMETIDO, con los mismos alcances del secreto bancario.

9.14. A la terminación del CONTRATO, proceder con la devolución al FIDEICOMITENTE de los BIENES FIDEICOMETIDOS que integran el PATRIMONIO FIDEICOMETIDO, según corresponda. Asimismo, firmar todos los documentos públicos y/o privados que resulten necesarios para dar por terminado el presente CONTRATO, devolver al FIDEICOMITENTE los BIENES FIDEICOMETIDOS e inscribir en el Registro Mobiliario de Contratos y cualquier otro registro que resulte pertinente, la terminación del CONTRATO.

9.15. Las demás obligaciones establecidas en el CONTRATO, la LEY DE BANCOS y el REGLAMENTO.

DÉCIMA: OBLIGACIONES DEL FIDEICOMITENTE

Sin perjuicio de las demás obligaciones asumidas por el FIDEICOMITENTE en virtud del presente CONTRATO, el FIDEICOMITENTE se obliga a lo siguiente:

10.1. Transferir en dominio fiduciario, mediante la suscripción del CONTRATO, a LA FIDUCIARIA los BIENES FIDEICOMETIDOS en el estado que los mismos se encuentran en la fecha de suscripción del presente CONTRATO. Lo anterior no perjudica la vigencia y extensión de las declaraciones efectuadas por el FIDEICOMITENTE respecto de los BIENES FIDEICOMETIDOS en el presente CONTRATO.

10.2. Asumir el pago de todos los tributos, cumpliendo con todas las obligaciones sustanciales y formales referidas a los tributos, que pudieran gravar los BIENES FIDEICOMETIDOS, el presente CONTRATO, así como los tributos que afectan o pudieran afectar la transferencia fiduciaria derivada del CONTRATO, conforme a lo establecido en la Cláusula Vigésimo Quinta, y cumplir las demás obligaciones relacionadas con dichos tributos, salvo por cualquier tributo respecto al cual exista un reclamo o impugnación de buena fe por parte del FIDEICOMITENTE.

10.3. Dar aviso a las demás PARTES de cualquier hecho o circunstancia que afecte o pueda afectar de manera adversa el PATRIMONIO FIDEICOMETIDO, que afecte o pueda afectar la validez o eficacia del CONTRATO, o que amenace o perturbe derechos del FIDEICOMITENTE bajo el CONTRATO dentro de los tres (3) DÍAS HÁBILES de haber tomado CONOCIMIENTO de tal hecho o circunstancia.

Fideicomiso N° 1339 Página 36 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

10.4. Inscribir el presente CONTRATO en el Registro Mobiliario de Contratos dentro del plazo máximo previsto en el presente CONTRATO, debiendo otorgar al efecto todos aquellos documentos complementarios que resulten necesarios con tal propósito. De la misma manera, el FIDEICOMITENTE se obliga a asumir los costos que demanden las referidas inscripciones.

10.5. Entregar a LA FIDUCIARIA la información adicional que pudiera solicitar para cumplir con la LEY DE BANCOS, el REGLAMENTO y la demás regulación aplicable, dentro de los cinco (5) DÍAS HÁBILES siguientes a cada requerimiento. Asimismo, entregar a LA FIDUCIARIA la información adicional que pudiera solicitar para cumplir con el presente CONTRATO, dentro de los cinco (5) DÍAS HÁBILES siguientes a cada requerimiento.

10.6. Pagar puntualmente la retribución de LA FIDUCIARIA, de acuerdo con el CONVENIO DE RETRIBUCIONES suscrito entre el FIDEICOMITENTE y LA FIDUCIARIA.

10.7. Transferir a LA FIDUCIARIA los recursos necesarios para pagar los gastos en que incurra en la administración y defensa del PATRIMONIO FIDEICOMETIDO, de acuerdo con lo establecido en la Cláusula Vigésimo Primera y Vigésimo Segunda del CONTRATO.

10.8. Remitir a LA FIDUCIARIA, dentro de los cinco (5) DÍAS HÁBILES siguientes de que le hubiere sido solicitada, toda la información que esta le requiera y esté a su alcance por resultar necesaria para la defensa del PATRIMONIO FIDEICOMETIDO, conforme a lo establecido en la Cláusula Vigésimo Primera del CONTRATO.

Al respecto, las PARTES dejan expresa constancia de que LA FIDUCIARIA no asumirá responsabilidad alguna en caso no pueda llevar a cabo la adecuada defensa del PATRIMONIO FIDEICOMETIDO producto de las limitaciones al envío de información por parte del FIDEICOMITENTE, conforme lo establecido en el párrafo precedente.

10.9. Las demás obligaciones que les corresponden establecidas en el CONTRATO, en la LEY DE BANCOS, en el REGLAMENTO, así como cualquier otra norma que en el futuro pudiera promulgarse.

10.10. Dentro de los dos (2) DÍAS HÁBILES siguientes de que se hubiese celebrado una junta de accionistas de GMP, GYM FERROVÍAS, ADEXUS y/o NORVIAL en la cual se haya acordado la distribución de dividendos, el FIDEICOMITENTE deberá remitir una comunicación indicando (i) la fecha de celebración de la junta; (ii) el monto total de los dividendos a distribuir a favor del FIDEICOMITENTE; y, (iii) el plazo en el que serán pagados.

10.11. A realizar todos los actos y comunicaciones requeridas para que se cumplan con las disposiciones del Numeral 7.2 del presente CONTRATO dentro de los plazos señalados en dicho numeral, sin perjuicio de la obligación de causar que cualquier FLUJO DINERARIO DIVIDENDO que se genere desde la suscripción del presente CONTRATO y hasta que se hayan cumplido con los actos señalados en dicho Numeral 7.2 sea depositado en las CUENTAS RECAUDADORAS o, de no estar disponibles dichas cuentas, en la cuenta bancaria que indique para tales efectos el FIDEICOMISARIO.

Fideicomiso N° 1339 Página 37 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

Asimismo, a no variar ni dejar sin efecto las comunicaciones remitidas a las SOCIEDADES EMISORAS y a ADEXUS, según lo señalado en el Numerales 7.2.3 y 7.2.1, salvo que cuente con la autorización previa y por escrito de LA FIDUCIARIA y el FIDEICOMISARIO.

10.12. A causar que los FLUJOS DINERARIOS DIVIDENDOS se depositen o transfieran a la CUENTA RECAUDADORA, en cualquier momento desde la suscripción del presente CONTRATO.

10.13. A no transferir, gravar, ceder, traspasar o bajo cualquier medio disponer de sus ACCIONES NORVIAL, ACCIONES GMP, ACCIONES GMF y ACCIONES ADEXUS, ni ninguno de los FLUJOS DINERARIOS y/o DERECHOS DE COBRO, salvo por lo establecido en el presente CONTRATO y la eventual ejecución de la PRENDA EXISTENTE, del CONTRATO DE GARANTÍA MOBILIARIA GYM FERROVIAS y el CONTRATO DE GARANTÍA MOBILIARIA NORVIAL.

10.14. A causar que se cumpla con la CONDICION SUSPENSIVA DIVIDENDOS ADEXUS y la CONDICIÓN SUSPENSIVA VENTA ADEXUS dentro de los plazos indicados en el presente CONTRATO.

DÉCIMO PRIMERA: CESIÓN DE DERECHOS Y DE POSICIÓN CONTRACTUAL

11.1. Las PARTES dejan expresa constancia de que el FIDEICOMITENTE no podrá ceder su posición contractual y que, respecto de sus derechos constituidos en virtud del presente CONTRATO, solo podrá ceder o transferir a terceras personas los mismos con autorización previa, expresa y por escrito de LA FIDUCIARIA y el FIDEICOMISARIO.

11.2. En caso LA FIDUCIARIA haya brindado su autorización, el nuevo fideicomitente se obliga a remitir a LA FIDUCIARIA, la información necesaria para llenar el Formato “Conoce a tu Cliente” de LA FIDUCIARIA, en el cual se consigna información sobre prevención del lavado de activos y financiamiento al terrorismo, así como la documentación societaria de dicho fideicomitente cesionario requerida por LA FIDUCIARIA, en ambos casos para cumplir con su obligación de reporte a la SBS y a la Unidad de Inteligencia Financiera, dentro de un plazo no mayor de quince (15) días calendario de requerida por LA FIDUCIARIA. En caso LA FIDUCIARIA, una vez recibida y revisada la información antes indicada, verificase que, según lo establecido en las LEYES APLICABLES sobre prevención de lavado de activos y financiamiento del terrorismo o con sus políticas internas, esté en obligación y/o deber de no prestar los servicios de entidad fiduciaria bajo el CONTRATO, se encontrará facultada a renunciar al ejercicio de su cargo, siendo aplicable lo establecido en la Cláusula Décimo Sexta del presente CONTRATO.

DÉCIMO SEGUNDA: ADMINISTRACIÓN DE DATOS PERSONALES E IDENTIFICACIÓN DE BENEFICIARIO FINAL

12.1 De conformidad con la Ley N° 29733, Ley de Protección de Datos Personales, desde la firma del CONTRATO el FIDEICOMITENTE y las personas naturales da expresamente su consentimiento para el tratamiento de los datos personales que por ellos sean facilitados o que se faciliten a través del CONTRATO o por cualquier

Fideicomiso N° 1339 Página 38 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

otro medio, exclusivamente con la finalidad de ejecutar el CONTRATO. Asimismo, el FIDEICOMITENTE acepta expresamente que LA FIDUCIARIA pueda compartir los datos personales, a terceros, como por ejemplo a Instituciones del Sistema Financiero exclusivamente con el fin de poder ejecutar el CONTRATO.

12.2 El FIDEICOMITENTE y las personas naturales declaran que todos los datos proporcionados son verdaderos y actualizados y que se les ha informado del uso de los mismos que LA FIDUCIARIA podrá realizar debiendo el FIDEICOMITENTE y las personas naturales comunicar cualquier cambio a LA FIDUCIARIA por escrito en cuanto se produzca el cambio.

Asimismo, el FIDEICOMITENTE declara conocer que tienen expeditos los derechos de acceso, rectificación, oposición y cancelación de los datos personales proporcionados a LA FIDUCIARIA, los cuales podrán ejercer mediante comunicación escrita a LA FIDUCIARIA.

12.3 Sin perjuicio de lo antes señalado, el FIDEICOMITENTE se obliga a atender cualquier requerimiento de información que les sea formulado por LA FIDUCIARIA, a satisfacción de esta, a fin de cumplir con sus políticas internas y las obligaciones legales que le resultan aplicables. Asimismo, el FIDEICOMITENTE autoriza a LA FIDUCIARIA a poner a disposición de la Superintendencia de Banca, Seguros y AFP (SBS), la Superintendencia del Mercado de Valores (SMV), la Superintendencia Nacional de Administración Tributaria (SUNAT) y/o cualquier otra entidad pública a cuya competencia se encuentre sujeta LA FIDUCIARIA información relativa a las personas naturales o jurídicas y/o entes jurídicos que ejerzan directa o indirectamente, a través del FIDEICOMITENTE, el control efectivo final del PATRIMONIO FIDEICOMETIDO, de los resultados o de las utilidades que se generen, paguen o distribuyan en el marco de lo dispuesto en el CONTRATO.

El FIDEICOMITENTE se obliga a realizar las acciones que resulten pertinentes a fin de permitir a LA FIDUCIARIA cumplir con las obligaciones legales que le resulten aplicables y en especial con la obligación de identificar a “beneficiarios finales” y la respectiva cadena de titularidad según lo dispuesto en el Código Tributario, el Decreto Legislativo N° 1372 y sus normas modificatorias, complementarias y/o reglamentarias, reconociendo asimismo la facultad de LA FIDUCIARIA de establecer mecanismos y/o criterios que le permitan obtener información adecuada y precisa sobre la identificación del beneficiario final.

El FIDEICOMITENTE reconoce y acepta que el incumplimiento total o parcial de las obligaciones contenidas en el presente numeral por parte del FIDEICOMITENTE constituirá causal de renuncia sin responsabilidad para LA FIDUCIARIA.

DÉCIMO TERCERA: PLAZO DEL FIDEICOMISO

13.1 Las PARTES acuerdan que, el presente CONTRATO estará vigente hasta que se haya cumplido con cancelar totalmente las OBLIGACIONES GARANTIZADAS o hasta el plazo máximo contemplado en la LEY DE BANCOS.

Fideicomiso N° 1339 Página 39 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

13.2 Asimismo, las PARTES dejan expresa constancia que el plazo del presente CONTRATO podrá darse por concluido cuando así lo comunique el FIDEICOMISARIO a LA FIDUCIARIA mediante carta notarial, con copia al FIDEICOMITENTE.

DÉCIMO CUARTA: RETRIBUCIÓN DE LA FIDUCIARIA

14.1. LA FIDUCIARIA cobrará al FIDEICOMITENTE, por la labor que se le encomienda en el presente CONTRATO, las comisiones previamente acordadas con LA FIDUCIARIA en el CONVENIO DE RETRIBUCIONES más el Impuesto General a las Ventas que corresponda, las cuales serán facturadas al FIDEICOMITENTE.

14.2. Para el pago de las referidas comisiones, LA FIDUCIARIA requerirá el pago al FIDEICOMITENTE, quien, dentro de los diez (10) DÍAS HÁBILES siguientes a dicho requerimiento deberá efectuar el pago correspondiente.

14.3. En caso el FIDEICOMITENTE no ponga a disposición de LA FIDUCIARIA los montos necesarios para atender los gastos antes indicados, LA FIDUCIARIA se encontrará facultada a cargar dichos importes en las CUENTAS RECAUDADORAS.

En caso las referidas cuentas no cuenten con los fondos suficientes para cumplir el pago de las comisiones a LA FIDUCIARIA (incluyendo el Impuesto General a las Ventas que corresponda), esta podrá solicitar a BANCO el cargo por el monto de dichas comisiones en cualquier cuenta bancaria que el FIDEICOMITENTE tenga abierta en dicha entidad bancaria, bastando para ello que LA FIDUCIARIA remita copia de la factura entregada al FIDEICOMITENTE, autorizando este también de manera irrevocable a aceptar los cargos.

DÉCIMO QUINTA: LIMITACIÓN DE RESPONSABILIDAD

15.1 Las PARTES reconocen, acuerdan y declaran que las funciones de LA FIDUCIARIA que le corresponden de acuerdo a lo establecido en el presente CONTRATO no son discrecionales, y se sujetan a lo establecido en el CONTRATO. Asimismo, las PARTES declaran que las obligaciones que LA FIDUCIARIA asume en virtud de lo dispuesto por el presente CONTRATO son de medios y no de resultados y que, en tal sentido, serán prestadas por LA FIDUCIARIA observando las Cláusulas del mismo, las disposiciones aplicables establecidas para tal efecto en la LEY y el REGLAMENTO, y las instrucciones escritas que, para tal efecto, le notifique el FIDEICOMITENTE, de ser el caso.

En tal sentido, la responsabilidad de LA FIDUCIARIA derivada del CONTRATO se limita a la inobservancia, por culpa grave o dolo, de las referidas disposiciones, obligaciones e instrucciones, todo ello de acuerdo con el artículo 259° de la LEY DE BANCOS. Por lo tanto, LA FIDUCIARIA está libre de cualquier responsabilidad por daños y perjuicios respecto del FIDEICOMITENTE, sus representantes y/o terceros, sus cesionarios o sucesores, en tanto cumpla con la diligencia debida, lo contemplado en el CONTRATO y las instrucciones escritas que le sean enviadas.

15.2 Sin perjuicio de lo establecido en el numeral precedente, las PARTES acuerdan de manera expresa que el FIDEICOMITENTE se compromete y obliga de manera expresa e incondicional a indemnizar e indemnizará a LA FIDUCIARIA y a cada uno

Fideicomiso N° 1339 Página 40 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

de sus respectivos funcionarios, directores, empleados, agentes y asesores, por todos y cada uno de los daños y perjuicios, que LA FIDUCIARIA pudiera sufrir como consecuencia directa o indirecta de los actos o instrucciones de las PARTES, no obstante haberse desempeñado conforme lo dispuesto en el presente CONTRATO y siempre que no medie dolo o culpa grave de LA FIDUCIARIA en relación a la celebración y suscripción y ejecución del CONTRATO, incluyendo pero sin limitarse a los casos en que LA FIDUCIARIA, ya sea durante la vigencia del CONTRATO o con posterioridad a la vigencia del mismo, hasta por un plazo máximo de diez (10) años contados desde la fecha de terminación del CONTRATO, fuera objeto de demandas, denuncias, acciones legales, medidas cautelares dentro o fuera del proceso o reclamos, interpuestos por cualquier causa que no le sean imputables, y ante cualquier fuero judicial, arbitral o administrativo por parte de terceros, quienes quiera que fueran estos, quedando en los mismos términos obligado el FIDEICOMITENTE a asumir y pagar todas las costas, costos y honorarios de abogados sustentados, de los procesos judiciales y/o arbitrales y/o administrativos referidos anteriormente, así como a asumir y pagar todas y cada una de las sumas de dinero que LA FIDUCIARIA estuviera obligada a pagar en cumplimiento de resoluciones, sentencias o mandatos expedidos en los procesos judiciales y/o arbitrales y/o administrativos referidos anteriormente, sin reserva ni limitación alguna, quedando en los mismos términos obligado el FIDEICOMITENTE a pagar y pagará a LA FIDUCIARIA las sumas de dinero que esta le requiera por escrito por los conceptos antes mencionados, debiendo para tal efecto acompañar copia de las resoluciones, sentencias, laudos arbitrales y comprobantes de pago que sostengan su reclamo, debiendo el FIDEICOMITENTE, de manera solidaria, efectuar el íntegro del pago dentro de los quince (15) DÍAS HÁBILES siguientes de ser requeridos a ello por LA FIDUCIARIA.

15.3 En relación con los gastos correspondientes a la asesoría legal externa, las PARTES acuerdan que LA FIDUCIARIA contratará a sus propios asesores legales externos. En caso funcionarios, directores, empleados, agentes y asesores de LA FIDUCIARIA estén involucrados en un mismo procedimiento o proceso ya sea administrativo, judicial o arbitral, todos estarán representados por un solo estudio de abogados o asesor legal externo, a menos que haya conflicto de intereses entre ellos; en cuyo caso, cada una de las partes involucradas en conflicto tendrá un asesor legal externo diferente.

DÉCIMO SEXTA: RENUNCIA DE LA FIDUCIARIA

16.1. LA FIDUCIARIA podrá renunciar al ejercicio de su cargo por causas debidamente sustentadas y aceptadas por la SBS, dando aviso al FIDEICOMITENTE, FIDEICOMISARIO y a la SBS. Para los efectos del presente CONTRATO, el plazo a que se refiere el segundo párrafo del artículo 269° de la LEY DE BANCOS se comenzará a computar desde que la aceptación de la renuncia por parte de la SBS haya sido puesta en conocimiento de LA FIDUCIARIA, del FIDEICOMITENTE y del FIDEICOMISARIO.

Ante la renuncia de LA FIDUCIARIA, será de aplicación lo dispuesto a continuación:

16.1.1. El FIDEICOMISARIO deberá nombrar a un fiduciario sucesor dentro de los cuatro (4) meses de producida la aceptación de la renuncia por la SBS, dicho nombramiento se entenderá producido una vez informado a LA FIDUCIARIA.

Fideicomiso N° 1339 Página 41 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

16.1.2. El fiduciario sucesor deberá aceptar dicho nombramiento por escrito, la aceptación implicará la suscripción en un mismo acto del Contrato de Transferencia del Fideicomiso, así como la entrega de los documentos que acreditan los derechos sobre el PATRIMONIO FIDEICOMETIDO con la correspondiente acta notarial de recepción. La aceptación deberá efectuarse dentro de los cuarenta y cinco (45) DÍAS posteriores al nombramiento del fiduciario sucesor. Una vez aceptado dicho nombramiento, el fiduciario sucesor tendrá de ahí en adelante todos los derechos, potestades, privilegios y obligaciones de LA FIDUCIARIA.

16.1.3. LA FIDUCIARIA se obliga a otorgar todos los documentos, ya sean públicos o privados, y a efectuar todas las acciones correspondientes para transferir todos sus derechos y facultades, así como los bienes que conforman el PATRIMONIO FIDEICOMETIDO al fiduciario sucesor. Todos los gastos incurridos para el nombramiento del fiduciario sucesor serán asumidos por la PARTE o las PARTES que hayan causado el asunto en mérito al cual LA FIDUCIARIA formuló su renuncia. En caso que la renuncia de LA FIDUCIARIA no sea imputable a ninguna de las PARTES, los gastos ocasionados por la renuncia serán de cargo de LA FIDUCIARIA.

16.1.4. LA FIDUCIARIA deberá presentar al FIDEICOMITENTE, al FIDEICOMISARIO y a la SBS por escrito, una rendición de cuentas precisa y documentada de su gestión.

16.2. LA FIDUCIARIA quedará liberada de cualquier otro deber y obligación como fiduciario en virtud del presente CONTRATO, una vez que entregue al fiduciario sucesor el PATRIMONIO FIDEICOMETIDO, lo cual deberá constar en acta, de acuerdo a lo establecido en el numeral 16.1.2. o, en caso no se logre nombrar al fiduciario sucesor, dentro del plazo señalado en el numeral 16.1.1 anterior.

DÉCIMO SÉTIMA: REMOCIÓN DE LA FIDUCIARIA

El FIDEICOMITENTE de común acuerdo con el FIDEICOMISARIO podrá reemplazar a LA FIDUCIARIA dando a esta un aviso previo de noventa (90) DÍAS. En tal caso, serán de aplicación las condiciones establecidas en la Cláusula Décimo Sexta anterior, según corresponda. LA FIDUCIARIA cooperará y brindará todo el apoyo para asegurar una transición sin mayor inconveniente al fiduciario sucesor.

Todos los gastos incurridos para el nombramiento del fiduciario sucesor serán asumidos por el FIDEICOMITENTE. En caso la remoción se deba a causa imputable a LA FIDUCIARIA, esta asumirá íntegramente los gastos que su remoción origine.

DÉCIMO OCTAVA: FACTOR FIDUCIARIO

18.1 De conformidad con lo establecido en el artículo 9° del REGLAMENTO, LA FIDUCIARIA designará –dentro de los quince (15) DÍAS de la fecha de entrada en vigencia del presente CONTRATO–al FACTOR FIDUCIARIO del presente fideicomiso, informando de esto, dentro del mismo plazo, al FIDEICOMITENTE y al FIDEICOMISARIO.

Fideicomiso N° 1339 Página 42 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

18.2 La designación del FACTOR FIDUCIARIO será puesta en conocimiento por LA FIDUCIARIA a la SBS dentro de los quince (15) DÍAS posteriores a la fecha de efectuada la designación. La SBS podrá remover al FACTOR FIDUCIARIO mediante resolución debidamente fundamentada.

18.3 En caso de sustitución o remoción del FACTOR FIDUCIARIO, LA FIDUCIARIA deberá nombrar al factor fiduciario sustituto, de lo cual informará por escrito al FIDEICOMITENTE y al FIDEICOMISARIO, siendo además de aplicación lo dispuesto en el numeral 18.2precedente.

DÉCIMO NOVENA: NOTIFICACIONES Y DOMICILIO

Las PARTES acuerdan que cualquier comunicación o notificación, judicial o extrajudicial, que deba cursarse entre las mismas, se efectuará a la atención de las personas señaladas en el numeral 19.5 siguiente, de acuerdo a cualquiera de los procedimientos que se detallan a continuación:

19.1. Mediante cartas, simples o notariales, presentadas en los domicilios señalados en la introducción del presente documento.

Las cartas se reputarán cursadas con los cargos de recepción de las mismas, los que deberán tener sello de recepción con la fecha.

19.2. Mediante correos electrónicos dirigidos desde y a las siguientes direcciones:

•  FIDEICOMITENTE:	•  mmiloslavich@gym.com.pe, y/o
	•  Fredy.chalco@gym.com.pe, y/o
	•  daniel.urbina@gym.com.pe, y/o
	•  ebustamante@gym.com.pe
•  Correo electrónico para que LA FIDUCIARIA envíe las facturas electrónicas:	•  Ricardo.pari@gym.com.pe, y Miguel.rodriguez@gym.com.pe
•  LA FIDUCIARIA:	•  Área de Operaciones: ppostigo@lf.pe; operaciones@lf.pe.
	•  Área de Contabilidad: smontes@lf.pe; gmontenegro@lf.pe
	•  Área Legal: duribe@lf.pe, gsoto@lf.pe
	•  Otros: pcomitre@lf.pe; rparodi@lf.pe
•  DEPOSITARIO:	•  Daniel.urbina@gym.com.pe
•  FIDEICOMISARIO:	•  tserantes@gramercy.com
	•  jomelia@gramercy.com

Los correos electrónicos se reputarán entregados a las PARTES mediante el reporte de confirmación de entrega.

Fideicomiso N° 1339 Página 43 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

19.3. Mediante los números telefónicos:

•  FIDEICOMITENTE:	213-6565
•  LA FIDUCIARIA:	710-0660
•  DEPOSITARIO:	213-6565
•  FIDEICOMISARIO:	+1 203 552 1989

19.4. Mediante los números de fax:

•  FIDEICOMITENTE:	N/A
•  LA FIDUCIARIA:	222-4260
•  DEPOSITARIO:	N/A
•  FIDEICOMISARIO:	N/A

19.5. Las únicas personas autorizadas para efectuar comunicaciones son:

•  FIDEICOMITENTE:	Mónica María Miloslavich Hart y/o Fredy Chalco Aguilar y/o Daniel Urbina Pérez y/o Elena Bustamante Laynes.
•  LA FIDUCIARIA:	Área de Operaciones: Paola Postigo, Ana Velasquez Área de Contabilidad: Susana Montes, Guadalupe Montenegro Área Legal: Diego Uribe, Gabriela Soto Otros: Paulo Comitre, Rafael Parodi
•  DEPOSITARIO:	Daniel René Urbina Pérez
•  FIDEICOMISARIO:	Tomas Serantes y Josh O’Melia

Cualquier modificación de los domicilios, facsímiles, teléfonos, correos electrónicos y/o personas autorizadas para efectuar comunicaciones, deberá ser puesta en conocimiento de las contrapartes mediante carta simple –sustancialmente de acuerdo al modelo que figura como ANEXO 7, a la cual se deberá adjuntar la ficha de registro de firmas de acuerdo al modelo incluido como ANEXO 7(i) al presente contrato, siendo los nuevos datos aplicables únicamente a las comunicaciones que se efectúen con posterioridad a la fecha de recepción de las referidas cartas notariales. En todos los casos, los nuevos domicilios deberán ser siempre dentro de la ciudad de Lima.

Cuando en el presente CONTRATO se haga referencia a comunicación escrita se entenderá que necesariamente deberá hacerse mediante la comunicación prevista en el numeral 19.1 de la presente Cláusula.

VIGÉSIMA: MODIFICACIÓN DEL CONTRATO

Las PARTES se reservan el derecho de modificar, de común acuerdo, los términos del CONTRATO en el momento en que lo estimen conveniente. Las modificaciones introducidas entrarán en vigencia a partir de la suscripción del contrato que para el efecto suscriban las PARTES, o en la fecha que las PARTES acuerden. Cualquier modificación al CONTRATO deberá hacerse necesariamente mediante adenda formalizada por Escritura Pública, salvo las modificaciones de direcciones, correos electrónicos y/o de las personas autorizadas para efectuar comunicaciones, las cuales se realizarán de conformidad con el procedimiento descrito en la Cláusula inmediata anterior.

Fideicomiso N° 1339 Página 44 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

VIGÉSIMO PRIMERA: DEFENSA DEL PATRIMONIO FIDEICOMETIDO

21.1 En caso fuera necesario o resultara conveniente realizar algún acto o intervenir en cualquier acción, excepción o medida cautelar, sea de carácter judicial o extrajudicial, con el objeto de cautelar el PATRIMONIO FIDEICOMETIDO, así como cualquiera de los derechos inherentes al mismo, LA FIDUCIARIA, sin asumir responsabilidad alguna, designará al(los) Estudio(s) de Abogados que le indiquen el FIDEICOMISARIO entre los listados en el ANEXO 8 del presente CONTRATO, o en caso éste no cumpla con señalarle a qué Estudio de Abogados deberá encargársele la defensa dentro los tres (3) DÍAS HÁBILES contados desde que LA FIDUCIARIA se lo hubiere requerido, esta -sin asumir responsabilidad alguna- procederá a designar a uno de los Estudios de Abogados entre los listados en el ANEXO 8 de este CONTRATO, a quien le encargarán los procesos judiciales, administrativos o extrajudiciales a que hubiere lugar.

21.2 En caso los Estudios de Abogados consignados en el referido ANEXO 8 del presente CONTRATO no estén prestando servicios o no aceptaran el encargo que se les formule por escrito, LA FIDUCIARIA propondrá al menos dos (2) Estudios de Abogados de primer nivel al FIDEICOMISARIO quienes deberán elegir al Estudio de Abogados a ser contratado a ser contratado dentro de los dos (2) DÍAS HÁBILES contados desde que LA FIDUCIARIA se lo hubiere solicitado. En caso el FIDEICOMISARIO no notifique su elección a LA FIDUCIARIA dentro del plazo establecido, ésta designará de la relación propuesta a uno de los Estudios de Abogados.

21.3 En todos los casos, LA FIDUCIARIA informará sobre la designación y el encargo al FIDEICOMISARIO y al FIDEICOMITENTE.

21.4 Queda claramente establecido que LA FIDUCIARIA no tendrá responsabilidad por la elección del Estudio de Abogados, ni por los resultados obtenidos por éste, pero hará sus mejores esfuerzos en la defensa del PATRIMONIO FIDEICOMETIDO.

21.5 Los gastos en que se incurran en la defensa del PATRIMONIO FIDEICOMETIDO serán asumidos conforme a lo dispuesto en la Cláusula Vigésimo Novena del CONTRATO.

VIGÉSIMO SEGUNDA: GASTOS Y COSTOS

22.1. Todos los gastos debidamente documentados y sustentados establecidos en el presente CONTRATO, así como los tributos, gastos y costos que se generen como consecuencia de la constitución, administración, defensa y devolución -de ser el caso- del PATRIMONIO FIDEICOMETIDO, incluyendo pero sin limitarse a los siguientes conceptos -que se entenderán comprendidos como gastos y costos para efectos de lo establecido en el numeral 2 del artículo 261° de la LEY DE BANCOS- que se encuentran detallados a continuación: (i) la remuneración y comisiones de LA FIDUCIARIA; (ii) los gastos que pudieran generarse por conceptos notariales, registrales, de abogados, de publicación en el Diario Oficial “El Peruano” conforme con lo establecido en el artículo 245° de la LEY DE BANCOS necesarios para la

Fideicomiso N° 1339 Página 45 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

formalización del presente CONTRATO y sus posteriores modificaciones; (iii) los gastos que pudieran generarse por conciliaciones, transacciones extrajudiciales, procesos judiciales, administrativos y/o arbitrales, incluidos costas y costos, así como cualquier indemnización y/o penalidad que tuvieran que ser asumidos por LA FIDUCIARIA en su condición de titularidad del dominio fiduciario sobre los BIENES FIDEICOMETIDOS; (iv) cualquier otro gasto derivado de la constitución, administración, defensa, ejecución y devolución del PATRIMONIO FIDEICOMETIDO en los que pudiera incurrir LA FIDUCIARIA en su calidad de fiduciario del PATRIMONIO FIDEICOMETIDO; (v) los portes, comisiones o tributos que se puedan generar por el mantenimiento de las CUENTAS RECAUDADORAS, así como las transferencias que se efectúen desde estas cuentas; (vi) los tributos que se adeuden con relación al PATRIMONIO FIDEICOMETIDO, existentes o por crearse en el futuro, así como los tributos que pudieran afectar la presente transferencia en dominio fiduciario; y, (vii) los intereses moratorios derivados de los conceptos anteriores; serán atendidos por el FIDEICOMITENTE, con cargo a las CUENTAS RECAUDADORAS.

22.2. En caso las CUENTAS RECAUDADORAS no cuenten con los montos suficientes para cancelar los gastos detallados en el numeral inmediato anterior, el FIDEICOMITENTE, deberá cancelarlo con cargo a recursos propios.

VIGÉSIMO TERCERA: LEGISLACIÓN APLICABLE

En todo lo no previsto en este documento, el CONTRATO se regirá por las leyes de la República del Perú y, en particular, por lo dispuesto en la LEY DE BANCOS, el REGLAMENTO o las normas que las pudiesen sustituir en el futuro.

VIGÉSIMO CUARTA: ARBITRAJE

Las PARTES y el DEPOSITARIO acuerdan expresamente que cualquier discrepancia o controversia que pudiera surgir entre ellas como consecuencia de la interpretación o ejecución del CONTRATO –o en vinculación con el mismo–, incluidas las relacionadas con su nulidad e invalidez, serán resueltas mediante arbitraje de derecho, el cual se sujetará a las siguientes reglas:

24.1. El arbitraje será llevado a cabo por un Tribunal Arbitral compuesto de tres (3) miembros.

24.2. El arbitraje se llevará a cabo bajo la administración y de acuerdo con los reglamentos y estatutos de la Cámara de Comercio Americana del Perú (en adelante el “Centro”), los cuales las partes declaran conocer.

24.3. El Tribunal Arbitral se constituirá de la siguiente forma:

24.3.1. Si las partes en conflicto fueran dos (2), cada una de ellas designará un árbitro y el tercero será designado de común acuerdo por los árbitros ya designados, dentro de los diez (10) DÍAS HÁBILES contados desde la fecha en que ambos árbitros sean nombrados por las partes. El tercer árbitro presidirá el Tribunal Arbitral.

Fideicomiso N° 1339 Página 46 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

En caso una de las partes no designe a su árbitro dentro de un plazo de diez (10) DÍAS HÁBILES contados desde la fecha en que una de ellas manifieste por escrito su voluntad de acogerse a la presente Cláusula, el árbitro que no haya sido designado será nombrado por el Centro. Asimismo, en caso los árbitros nombrados por las partes no nombren al tercer árbitro dentro del plazo establecido en el párrafo anterior, el tercer árbitro será designado por el Centro.

24.3.2. Si las partes en conflicto fueran tres (3) o más, los tres (3) árbitros serán designados por el Centro, entre los cuales el Centro designará al árbitro que presidirá el Tribunal Arbitral.

24.4. El Tribunal Arbitral tendrá un plazo de hasta ciento veinte (120) DÍAS HÁBILES desde su instalación para expedir el respectivo laudo arbitral, el cual será inapelable. Asimismo, el Tribunal Arbitral puede quedar encargado de determinar con precisión la controversia, así como otorgar una prórroga en caso fuera necesario para emitir el laudo.

24.5. El lugar del arbitraje será la ciudad de Lima, Perú y el idioma que se utilizará en el procedimiento arbitral será el castellano.

24.6. Los gastos y costos correspondientes al arbitraje serán asumidos de conformidad con lo que disponga el Tribunal Arbitral en su laudo. Dichos gastos y costos comprenderán los relativos a la contratación de asesoría jurídica y/o abogados encargados de la defensa respectiva.

Asimismo, en caso de existir dos o más pretensiones que se discutan en el procedimiento arbitral, la parte que se vea desfavorecida en la mayoría de aquellas será la obligada al pago de los gastos y costos referidos en el párrafo inmediato anterior.

24.7. En caso de que alguna de las partes decidiera interponer recurso de anulación contra el laudo arbitral ante el Poder Judicial, deberá constituir previamente a favor de la parte o las partes contrarias una Carta Fianza otorgada por un banco de primer orden con sede en Lima, equivalente al monto de la condena establecida en el laudo arbitral, en caso no se haya establecido cuantía en el mismo, la Carta Fianza deberá otorgarse por un monto equivalente a USD 50,000.00 (Cincuenta Mil con 00/100 DÓLARES), a la orden de la o las partes contrarias, la misma que será solidaria, irrevocable, incondicionada y ejecutable en caso que dicho recurso, en fallo definitivo, no fuera declarado fundado. Dicha Carta Fianza deberá estar vigente durante el tiempo que dure el proceso promovido y será entregada en custodia a un notario público de la Ciudad de Lima, salvo que por disposición legal deba ser entregada en custodia a la Corte Superior.

24.8. Para cualquier intervención de los jueces y tribunales ordinarios dentro de la mecánica arbitral, las PARTES se someten expresamente a la jurisdicción de los jueces y tribunales de la ciudad de Lima Cercado, renunciando al fuero de sus domicilios.

Fideicomiso N° 1339 Página 47 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

VIGÉSIMO QUINTA: ASPECTOS TRIBUTARIOS REFERIDOS AL PATRIMONIO FIDEICOMETIDO

25.1 Dentro de los cinco (5) DÍAS HÁBILES desde el cierre de cada trimestre, el FIDEICOMITENTE deberá remitir a LA FIDUCIARIA copia de la presentación de las Declaraciones Juradas correspondientes a los ingresos y/o los tributos que se encuentre obligado a declarar y/o pagar el FIDEICOMITENTE en relación con el CONTRATO y al PATRIMONIO FIDEICOMETIDO dentro del respectivo trimestre; así como al cumplimiento del mismo, debiendo remitir copia de las constancias de los pagos efectuados, de conformidad con lo dispuesto en el numeral 10.2 de la Cláusula Décima del CONTRATO.

25.2 LA FIDUCIARIA, de ser necesario, regularizará el cumplimiento de toda obligación tributaria sea formal o sustancial, cobrando los gastos incurridos debidamente documentados al FIDEICOMITENTE, conforme lo establecido en la Cláusula Vigésimo Segunda del CONTRATO. Para este efecto, LA FIDUCIARIA deberá comunicar previamente al FIDEICOMITENTE para que este demuestre el cumplimiento de sus obligaciones tributarias, lo que deberá efectuar dentro de los diez (10) DÍAS HÁBILES de recibida la referida comunicación.

25.3 En caso LA FIDUCIARIA reciba alguna resolución de determinación, resolución de multa, orden de pago o cualquier otro tipo de comunicación de parte de la Administración Tributaria o de cualquier otra AUTORIDAD GUBERNAMENTAL, en mérito a la cual se le exija el pago de cualquier tributo que pudiera haberse originado por la celebración o ejecución del CONTRATO, la transferencia de los BIENES FIDEICOMETIDOS al PATRIMONIO FIDEICOMETIDO o por los BIENES FIDEICOMETIDOS mismos, LA FIDUCIARIA remitirá una carta al FIDEICOMITENTE, adjuntando copia de la documentación remitida por la Administración Tributaria y requiriendo la remisión de las constancias de pago del íntegro de los tributos, moras, intereses, multas y demás recargos que sean aplicables o copia del recurso presentado ante la Administración Tributaria correspondiente, en caso se opte por la objeción del requerimiento tributario.

25.4 Las constancias de pago, así como los recursos presentados, deberán ser remitidos a LA FIDUCIARIA dentro de los cinco (5) DÍAS HÁBILES después del vencimiento del plazo para impugnar el requerimiento; en caso contrario, LA FIDUCIARIA podrá optar, sin responsabilidad, por efectuar los pagos cobrando los gastos incurridos al FIDEICOMITENTE.

VIGÉSIMO SEXTA: INSCRIPCIÓN REGISTRAL

El FIDEICOMITENTE –a su cuenta y costo-, presentará la solicitud de inscripción del presente CONTRATO al Registro Mobiliario de Contratos en un plazo máximo de un (1) DÍA HÁBIL desde la fecha en que sea suscrita la Escritura Pública del CONTRATO; debiendo LA FIDUCIARIA hacer seguimiento al proceso de inscripción del presente CONTRATO en dichos registros, de acuerdo con lo regulado en las LEYES APLICABLES. El FIDEICOMITENTE deberá entregar a LA FIDUCIARIA, con copia al FIDEICOMISARIO, dentro de los dos (2) DÍAS HÁBILES siguientes de suscrita la Escritura Pública del CONTRATO, copia de la constancia de presentación de los partes correspondientes a la Escritura Pública ante el Registro Mobiliario de Contratos.

Fideicomiso N° 1339 Página 48 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

Asimismo, el FIDEICOMITENTE se obliga a obtener la inscripción del CONTRATO dentro de los treinta (30) DÍAS HÁBILES de suscrito el presente CONTRATO, pudiendo este plazo ampliarse excepcionalmente por treinta (30) DÍAS HÁBILES adicionales en caso de observaciones por parte del registrador público correspondiente, siempre que el FIDEICOMITENTE demuestre a LA FIDUCIARIA que está realizando los actos necesarios para subsanar dichas observaciones.

Una vez obtenida la inscripción en el Registro Mobiliario de Contratos, el FIDEICOMITENTE deberá entregar a LA FIDUCIARIA, con copia al FIDEICOMISARIO, dentro de los cinco (5) DÍAS HÁBILES siguientes a la inscripción del PATRIMONIO FIDEICOMETIDO, copia de los asientos de inscripción correspondientes.

LA FIDUCIARIA supervisará el proceso de inscripción con el FIDEICOMITENTE, por cuenta y costo del mismo, de acuerdo a lo establecido en la Cláusula Vigésimo Segunda.

Considerando que mediante Resolución de la Superintendente Nacional de los Registros Públicos N° 316-2008-SUNARP-SN del 25 de noviembre de 2008, se estableció que las transferencias de dominio fiduciario serían calificadas como actos invalorados, las PARTES reconocen que la transferencia del dominio fiduciario que se produce por el presente acto será considerada un invalorado.

PRIMERA CLÁUSULA ADICIONAL: DE LA FALSEDAD DE DECLARACIONES Y CESIÓN DE POSICIÓN CONTRACTUAL O RESOLUCIÓN DEL CONTRATO

1. En el caso que LA FIDUCIARIA tome conocimiento sobre la ocurrencia de cualquiera de los hechos detallados en los numerales (i), (ii) o (iii) del numeral 5.9 del presente CONTRATO; podrá proceder a remitir una comunicación en la cual (i) pondrá dicha situación en conocimiento del FIDEICOMITENTE y del FIDEICOMISARIO; y (ii) manifestará su intención de ceder su posición contractual en el CONTRATO o resolver el CONTRATO, de acuerdo a la regulación contenida en los numerales 2 y 3 siguientes (en adelante, la “Comunicación LF”).

Luego de haber recibido dicha comunicación, el FIDEICOMISARIO contará con un plazo de quince (15) DÍAS HÁBILES, para informar a LA FIDUCIARIA si deberá proceder a (i) ceder su posición contractual a otro fiduciario, de acuerdo con lo establecido en el artículo 1435 y siguientes del Código Civil o (ii) formalizar la resolución del CONTRATO, de acuerdo con lo establecido en el artículo 1430 del Código Civil y al numeral 8 del artículo 269 de la Ley General del Sistema Financiero y del Sistema de Seguros y Orgánica de la Superintendencia de Banca y Seguros (en adelante, la “Comunicación de Salida”).

2. Cesión de posición contractual de LA FIDUCIARIA:

En caso el FIDEICOMISARIO le indique a LA FIDUCIARIA mediante la Comunicación de Salida, que deberá proceder con la cesión de su posición contractual en el CONTRATO, será de aplicación lo establecido a continuación:

2.1 En caso el FIDEICOMISARIO no instruya la resolución, deberá nombrar a un fiduciario sucesor -y comunicar dicho nombramiento a LA FIDUCIARIAdentro de los treinta (30) DÍAS HÁBILES siguientes a la fecha en la que LA fiduciario sucesor -y comunicar dicho nombramiento a LA FIDUCIARIA- dentro de los treinta (30) DÍAS HÁBILES siguientes a la fecha en la que LA FIDUCIARIA envíe la Comunicación LF.

Fideicomiso N° 1339 Página 49 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

2.2 El fiduciario sucesor deberá aceptar dicho nombramiento por escrito. La aceptación implicará la suscripción en un mismo acto del Contrato de Transferencia del Fideicomiso, así como la entrega de los documentos que acreditan los derechos sobre el PATRIMONIO FIDEICOMETIDO con la correspondiente acta notarial de recepción. La aceptación deberá efectuarse dentro de los quince (15) DÍAS HÁBILES posteriores al nombramiento del fiduciario sucesor. Una vez aceptado dicho nombramiento, el fiduciario sucesor tendrá - en adelante- todos los derechos, potestades, privilegios y obligaciones de LA FIDUCIARIA.

2.3 Todos los gastos incurridos para el nombramiento del fiduciario sucesor serán asumidos por el FIDEICOMITENTE, sin que sea relevante determinar, para este efecto, la parte o las partes que hayan causado el asunto en mérito al cual LA FIDUCIARIA cedió su posición contractual en el CONTRATO.

2.4 En el supuesto en que (i) el FIDEICOMISARIO no cumpla con designar a un fiduciario sucesor dentro del plazo establecido en el numeral 2.1, o (ii) el fiduciario sucesor no acepte su nombramiento dentro del plazo indicado en el numeral 2.2, o (iii) los documentos necesarios para la cesión de posición contractual de LA FIDUCIARIA no se hayan suscrito dentro de los treinta (30) DÍAS HÁBILES siguientes a la recepción de la Comunicación de Salida; LA FIDUCIARIA podrá -sin responsabilidad- proceder a formalizar la resolución del CONTRATO de acuerdo a la regulación contenida en el numeral 3 siguiente.

3. Resolución del CONTRATO:

3.1 LA FIDUCIARIA podrá -actuando de acuerdo con lo establecido en el artículo 1430 del Código Civil y al numeral 8 del artículo 269 de la LEY GENERAL- de acuerdo a lo acordado con el FIDEICOMITENTE y el FIDEICOMISARIO, proceder con la resolución del CONTRATO, en caso se configure alguno de los siguientes supuestos:

a. Cuando el FIDEICOMISARIO así lo haya instruido mediante la Comunicación de Salida;

b. Cuando se haya configurado cualquiera de los supuestos indicados en el numeral 2.4; o,

c. Cuando el FIDEICOMISARIO no cumpla con enviar la Comunicación de Salida dentro del plazo de quince (15) DIAS HÁBILES de haber recibido la Comunicación LF.

3.2 Previamente a la suscripción de los documentos necesarios para formalizar la resolución del CONTRATO, LA FIDUCIARIA deberá (i) constituir una garantía mobiliaria a favor del FIDEICOMISARIO (o del tercero que éste indique), en

Fideicomiso N° 1339 Página 50 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

respaldo de las OBLIGACIONES GARANTIZADAS sobre los bienes y derechos que forman parte del PATRIMONIO FIDEICOMETIDO, y/o (ii) suscribirá todos los documentos que resulten necesarios para llevar a cabo una cesión de derechos, sobre los BIENES FIDEICOMETIDOS a favor del FIDEICOMISARIO. Para estos efectos, el FIDEICOMITENTE y EL FIDEICOMISARIO aceptan expresa e irrevocablemente que LA FIDUCIARIA podrá suscribir todos los documentos públicos y/o privados que resulten necesarios para otorgar las garantías indicadas en los numerales (i) y (ii) del presente párrafo, según corresponda.

3.3 Luego de haber constituido las garantías indicadas en los numerales (i) y/o (ii) del numeral 3.2, según corresponda, y de haber suscrito todos los documentos que resulten necesarios para dichos efectos, LA FIDUCIARIA procederá a la suscripción de los documentos necesarios para formalizar la resolución del CONTRATO.

3.4 El FIDEICOMITENTE y el FIDEICOMISARIO reconocen y aceptan irrevocablemente que LA FIDUCIARIA podrá- mas no está obligada a- resolver el contrato de acuerdo con lo establecido en el artículo 1430 del Código Civil y al numeral 8 del artículo 269 de la LEY GENERAL; sin que ello implique responsabilidad alguna para LA FIDUCIARIA.

4. El FIDEICOMITENTE y/o el FIDEICOMISARIO aceptan expresamente que no será necesario remitir una NOTIFICACIÓN DE INCUMPLIMIENTO y/o NOTIFICACIÓN DE ACELERACIÓN, para que LA FIDUCIARIA, a su sola discreción y de acuerdo a lo establecido en los numerales 2 y 3 anteriores, proceda con la cesión de su posición contractual en el CONTRATO o a la resolución del CONTRATO. En tal sentido, el FIDEICOMITENTE y el FIDEICOMISARIO acuerdan que LA FIDUCIARIA podrá -facultativamente- ceder su posición contractual en el presente CONTRATO o resolverlo, según lo regulado previamente y de acuerdo a lo establecido en el Código Civil y la LEY GENERAL.

5. Por tanto, el FIDEICOMITENTE y/o el FIDEICOMISARIO renuncian expresamente a cualquier acción que limite, restrinja o se oponga a la cesión de posición contractual de LA FIDUCIARIA en este CONTRATO y/o a la resolución contractual del presente CONTRATO, indicadas en esta Cláusula, aceptando el FIDEICOMITENTE y/o el FIDEICOMISARIO las consecuencias, costos y gastos asociados y demás que ocurran y/o en los que se incurra.

SEGUNDA CLÁUSULA ADICIONAL: CONDICIÓN SUSPENSIVA VENTA ADEXUS

Las PARTES acuerdan que la transferencia de los DERECHOS DE COBRO VENTA ADEXUS y los FLUJOS DINERARIOS VENTA ADEXUS entrará en vigencia y surtirá plenos efectos, de manera automática y sin necesidad de acto adicional alguno, en la fecha en que: LA FIDUCIARIA (en su condición de fiduciaria bajo el CONTRATO DE FIDEICOMISO GM), bajo responsabilidad objetiva del FIDEICOMITENTE, verifique el depósito de cierto monto dinerario en la cuenta bancaria indicada bajo los términos de la Carta de Dispensa de fecha 30 de julio de 2019, suscrita por, entre otros, el FIDEICOMITENTE y los “Local Facility Lenders” (según dicho término se define en el CONTRATO DE PRÉSTAMO)( la “CONDICIÓN SUSPENSIVA VENTA ADEXUS”). Las PARTES acuerdan que la CONDICIÓN SUSPENSIVA VENTA ADEXUS antes mencionada deberá verificarse en el plazo máximo de dos (2) DIAS

Fideicomiso N° 1339 Página 51 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

HABILES desde suscrito el CONTRATO, debiendo LA FIDUCIARIA emitir dentro de dicho plazo un comunicado por cualquier medio al FIDEICOMISARIO y al FIDEICOMITENTE confirmando la verificación del pago anteriormente indicado, bajo responsabilidad objetiva del FIDEICOMITENTE.

Sin perjuicio de la comunicación indicada en el párrafo anterior, dentro del DÍA HÁBIL siguiente a la fecha en que se verifique el cumplimiento de la CONDICIÓN SUSPENSIVA VENTA ADEXUS, LA FIDUCIARIA deberá entregar al Notario Público de Lima, Dr. Luis Dannon Brender, u otro que acuerden las PARTES, una minuta unilateral de cumplimiento de condición suspensiva (la “Minuta de Cumplimiento de la Condición Venta Adexus”), en los términos del modelo de minuta unilateral de levantamiento de condición suspensiva contenido en el Anexo 9 de este CONTRATO, para efectos de que dicho Notario Público eleve a escritura pública la Minuta de Cumplimiento de la Condición Venta Adexus.

Se deja constancia de que la suscripción de la Minuta de Cumplimiento de la Condición Venta Adexus bastará para dar por acreditado el cumplimiento de la CONDICIÓN SUSPENSIVA VENTA ADEXUS y, en consecuencia, transferido en dominio fiduciario los DERECHOS DE COBRO VENTA ADEXUS y los FLUJOS DINERARIOS VENTA ADEXUS en los términos del CONTRATO, sin que sea necesario acto adicional de ningún tipo, y sin perjuicio de la obligación de elevar a escritura pública e inscribir dicha minuta.

EL FIDEICOMITENTE deberá causar, en coordinación con LA FIDUCIARIA, que (i) dentro de los dos (2) DÍAS HÁBILES siguientes a la fecha de suscripción del CONTRATO, se cumpla la CONDICIÓN SUSPENSIVA VENTA ADEXUS; (ii) dentro del DÍA HÁBIL siguiente a la fecha de suscripción de la Minuta de Cumplimiento de la Condición Venta Adexus, se presenten los partes notariales de la escritura pública que dicha minuta origine ante el Registro Mobiliario de Contratos; y, (iii) se obtenga la inscripción de la Minuta de Cumplimiento de la Condición Venta Adexus en la partida registral correspondiente en el Registro Mobiliario de Contratos, dentro de los plazos y bajo las condiciones establecidas en el segundo párrafo de la Cláusula Vigésimo Sexta precedente, pero contado a partir de la fecha de suscripción de la Minuta de Cumplimiento de la Condición Venta Adexus. Asimismo, y sin perjuicio que el cumplimiento de los actos dispuestos en la presente Segunda Cláusula Adicional sea responsabilidad objetiva del FIDEICOMITENTE, LA FIDUCIARIA se compromete a actuar con la diligencia requerida y desplegando sus mejores esfuerzos en el proceso de inscripción, a fin de lograr la inscripción de la Minuta de Cumplimiento de la Condición de acuerdo a lo indicado en el presente párrafo.

Las PARTES acuerdan expresamente que el incumplimiento de lo indicado en la presente Segunda Cláusula Adicional (incluyendo, sin limitarse, la falta de verificación del cumplimiento de la CONDICIÓN SUSPENSIVA VENTA ADEXUS dentro del plazo indicado en esta cláusula), constituirá un EVENTO DE INCUMPLIMIENTO.

TERCERA CLÁUSULA ADICIONAL: CONDICIÓN SUSPENSIVA DIVIDENDOS ADEXUS

Las PARTES acuerdan que la transferencia de los DERECHOS DE COBRO DIVIDENDOS ADEXUS correspondientes a las ACCIONES ADEXUS GRAVADAS y los FLUJOS DINERARIOS DIVIDENDOS ADEXUS correspondientes a las ACCIONES ADEXUS GRAVADAS entrará en vigencia y surtirá plenos efectos, de manera automática y sin necesidad de acto adicional alguno, en la fecha en que: (i) el FIDEICOMITENTE realice un prepago total del financiamiento garantizado por la PRENDA EXISTENTE, lo cual deberá suceder dentro del

Fideicomiso N° 1339 Página 52 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

plazo máximo de cinco (5) DIAS HABILES desde suscrito el presente CONTRATO; y (ii) la PRENDA EXISTENTE se hubiese levantado (la “CONDICIÓN SUSPENSIVA DIVIDENDOS ADEXUS”). Las PARTES acuerdan que la CONDICIÓN SUSPENSIVA DIVIDENDOS ADEXUS antes mencionada deberá verificarse en el plazo máximo de treinta (30) días desde verificado el prepago descrito en el literal (i) anterior, bajo responsabilidad del FIDEICOMITENTE.

El cumplimiento de la CONDICIÓN SUSPENSIVA DIVIDENDOS ADEXUS será comunicado por el FIDEICOMISARIO al FIDUCIARIO, luego de haber recibido las acreditaciones a que se refiere la Cláusula 7.20(c) del CONTRATO DE PRÉSTAMO.

Dentro del DÍA HÁBIL siguiente a la fecha en que se le comunique a LA FIDUCIARIA el cumplimiento de la CONDICIÓN SUSPENSIVA DIVIDENDOS ADEXUS, LA FIDUCIARIA deberá entregar al Notario Público de Lima, Dr. Luis Dannon Brender, u otro que acuerden las PARTES, una minuta unilateral de cumplimiento de condición suspensiva (la “Minuta de Cumplimiento de la Condición Dividendos Adexus”), en los términos del modelo de minuta unilateral de levantamiento de condición suspensiva contenido en el Anexo 10 de este CONTRATO, para efectos de que dicho Notario Público eleve a escritura pública la Minuta de Cumplimiento de la Condición Dividendos Adexus.

Se deja constancia de que la suscripción de la Minuta de Cumplimiento de la Condición Dividendos Adexus bastará para dar por acreditado el cumplimiento de la CONDICIÓN SUSPENSIVA DIVIDENDOS ADEXUS y, en consecuencia, transferido en dominio fiduciario los DERECHOS DE COBRO DIVIDENDOS ADEXUS correspondientes a las ACCIONES ADEXUS GRAVADAS y los FLUJOS DINERARIOS DIVIDENDOS ADEXUS correspondientes a las ACCIONES ADEXUS GRAVADAS, en los términos del CONTRATO, sin que sea necesario acto adicional de ningún tipo, y sin perjuicio de la obligación de elevar a escritura pública e inscribir dicha minuta.

EL FIDEICOMITENTE deberá causar, en coordinación con LA FIDUCIARIA, que (i) dentro de los plazos señalados en la presente Tercera Cláusula Adicional se cumpla la CONDICIÓN SUSPENSIVA DIVIDENDOS ADEXUS; (ii) dentro del DÍA HÁBIL siguiente a la fecha de suscripción de la Minuta de Cumplimiento de la Condición Dividendos Adexus, se presenten los partes notariales de la escritura pública que dicha minuta origine ante el Registro Mobiliario de Contratos; y, (iii) se obtenga la inscripción de la Minuta de Cumplimiento de la Condición Dividendos Adexus en la partida registral correspondiente en el Registro Mobiliario de Contratos, dentro de los plazos y bajo las condiciones establecidas en el segundo párrafo de la Cláusula Vigésimo Sexta precedente, pero contado a partir de la fecha de suscripción de la Minuta de Cumplimiento de la Condición Dividendos Adexus. Asimismo, y sin perjuicio que el cumplimiento de los actos dispuestos en la presente Tercera Cláusula Adicional sea responsabilidad objetiva del FIDEICOMITENTE, LA FIDUCIARIA se compromete a actuar con la diligencia requerida y desplegando sus mejores esfuerzos en el proceso de inscripción, a fin de lograr la inscripción de la Minuta de Cumplimiento de la Condición de acuerdo a lo indicado en el presente párrafo.

Las PARTES acuerdan expresamente que el incumplimiento de lo indicado en la presente Tercera Cláusula Adicional (incluyendo, sin limitarse, la falta de verificación del cumplimiento de la CONDICIÓN SUSPENSIVA DIVIDENDOS ADEXUS dentro del plazo indicado en esta cláusula), constituirá un EVENTO DE INCUMPLIMIENTO.

Fideicomiso N° 1339 Página 53 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

Agregue usted, señor Notario, las demás cláusulas de ley, expidiendo un testimonio para cada una de las PARTES que intervienen en este CONTRATO.

Lima, 31 de julio de 2019

FIDEICOMITENTE

Daniel René Urbina Pérez	Francisco Augusto Baertl Montori
LA FIDUCIARIA
Diego Alberto Uribe Mendoza	Rafael Mauricio Parodi Parodi
FIDEICOMISARIO
Gian Carlo Panzera
DEPOSITARIO
Daniel René Urbina Pérez

Fideicomiso N° 1339 Página 54 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

ANEXO 1

CRONOGRAMA

De acuerdo con lo establecido en el CONTRATO DE PRÉSTAMO y salvo cualquier pago voluntario (Voluntary Payment) y/o pago mandatorios (Mandatory Repayments) realizado conforme a los numerales 4.02 (b) a 4.02 (e) del CONTRATO DE PRÉSTAMO realizado por el FIDEICOMITENTE a favor del FIDEICOMISARIO de conformidad con lo establecido en el CONTRATO DE PRÉSTAMO, el FIDEICOMITENTE estará obligado a pagar los siguientes importes en las siguientes FECHAS DE PAGO, más los intereses aplicables conforme al CONTRATO DE PRÉSTAMO:

FECHAS DE PAGO	MONTO INTERESES (Interest payment schedule) (US$)	MONTO AMORTIZACIÓN CAPITAL (Amortization payment schedule) (US$)	TOTAL A PAGAR (Total payment schedule)
30-Sept-19	539,680.56	0.00	539,680.56
31-Dic-19	813,944.44	0.00	813,944.44
31-Mar-20	819,680.56	0.00	819,680.56
30-Jun-20	827,215.28	0.00	827,215.28
30-Sept-20	851,131.94	0.00	851,131.94
31-Dic-20	858,666.67	0.00	858,666.67
31-Mar-21	840,000.00	5,000,000.00	5,840,000.00
30-Jun-21	728,000.00	5,000,000.00	5,728,000.00
30-Sept-21	613,333.33	5,000,000.00	5,613,333.33
30-Dic-21	485,333.33	5,000,000.00	5,485,333.33
31-Mar-22	376,291.67	5,000,000.00	5,376,291.67
30-Jun-22	255,305.56	5,000,000.00	5,255,305.56
29-Jul-22	43,486.11	5,000,000.00	5,043,486.11

Fideicomiso N° 1339 Página 55 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

ANEXO 2

Modelo de NOTIFICACIÓN DE ACELERACIÓN

[CARTA NOTARIAL]

“Lima, [Fecha]

Señores

La Fiduciaria S.A.

Presente.-

Atención: [●]

Referencia: Notificación de Aceleración

Estimados señores,

La presente es con relación al Contrato de Fideicomiso (en adelante, el Contrato) celebrado con fecha 31 de julio de 2019 entre Graña y Montero S.A.A, en calidad de fideicomitente; La Fiduciaria S.A., en calidad de Fiduciario; y CS Peru Infrastructure Holdings LLC, en calidad de Fideicomisario; y, Daniel René Urbina Pérez, en calidad de Depositario (el Contrato).

Todos los términos cuya primera letra se encuentre en mayúscula tendrán el significado que se les asigna en el Contrato.

Por medio de la presente les informamos que se ha verificado un Evento de Incumplimiento, y por lo tanto, se ha acelerado el cumplimiento de las Obligaciones Garantizadas hasta por la cantidad de US$ [●]. En ese sentido, les instruimos a que procedan con la administración y/o ejecución, de ser el caso, del Patrimonio Fideicometido de acuerdo con lo establecido en el numeral 8.5 de la Cláusula Octava del Contrato.

Sin otro particular, quedamos de ustedes.

Atentamente,

CS Peru Infrastructure Holdings LLC

cc. Graña y Montero S.A.A

Fideicomiso N° 1339 Página 56 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

ANEXO 3

Modelo de NOTIFICACIÓN DE CESE DE INCUMPLIMIENTO

[CARTA NOTARIAL]

Lima, [fecha]

Señores

La Fiduciaria S.A.

Calle Los Libertadores N° 155, piso 8

San Isidro, Lima

Presente.-

Atención: [●]

CC: Graña y Montero S.A.A

Asunto: Notificación de Cese de Incumplimiento

Estimados señores:

La presente es con relación al Contrato de Fideicomiso (en adelante, el Contrato) celebrado con fecha 31 de julio de 2019 entre Graña y Montero S.A.A, en calidad de fideicomitente; La Fiduciaria S.A., en calidad de Fiduciario; y CS Peru Infrastructure Holdings LLC, en calidad de Fideicomisario; y, Daniel René Urbina Pérez, en calidad de Depositario (el Contrato).

Por medio de la presente, les informamos que el incumplimiento al [indicar Obligación Garantizada incumplida] comunicado mediante la Notificación de Incumplimiento de fecha [●] de [●] de [●] ha sido debidamente subsanado.

En consecuencia, al Día Hábil siguiente de haber recibido la presente Notificación de Cese de Incumplimiento, les instruimos que procedan a administrar el Patrimonio Fideicometido, de acuerdo a lo establecido en el numeral 8.4 de la Cláusula Octava del Contrato.

Sin otro particular, quedamos de usted.

Atentamente,

CS Peru Infrastructure Holdings LLC

cc. Graña y Montero S.A.A

Fideicomiso N° 1339 Página 57 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

ANEXO 4

Modelo de NOTIFICACIÓN DE INCUMPLIMIENTO

[CARTA NOTARIAL]

Lima, [fecha]

Señores

La Fiduciaria S.A.

Calle Los Libertadores N° 155, piso 8

San Isidro, Lima

Presente.-

Atención: [●]

CC: Graña y Montero S.A.A

Asunto: Notificación de Incumplimiento

Estimados señores:

La presente es con relación al Contrato de Fideicomiso (en adelante, el Contrato) celebrado con fecha 31 de julio de 2019 entre Graña y Montero S.A.A, en calidad de fideicomitente; La Fiduciaria S.A., en calidad de Fiduciario; y CS Peru Infrastructure Holdings LLC, en calidad de Fideicomisario; y, Daniel René Urbina Pérez, en calidad de Depositario (el Contrato).

Al respecto, en calidad de declaración jurada les comunicamos que se ha verificado un Evento de Incumplimiento a [indicar obligación garantizada incumplida]. Por lo tanto, solicitamos a La Fiduciaria que proceda de conformidad con lo establecido en el numeral 8.3 y siguientes de la Cláusula Octava del Contrato.

Sin otro particular, quedamos de ustedes.

Atentamente,

CS Peru Infrastructure Holdings LLC

cc. Graña y Montero S.A.A.

Fideicomiso N° 1339 Página 58 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

ANEXO 5 - A

Modelo de comunicación a GMP / ADEXUS

Modelo de comunicación a GMP:

[CARTA NOTARIAL]

Lima, [fecha]

Señores

[●]

[●]

Presente.-

Atención:            [●]

Referencia:        Comunicación de Contrato de Fideicomiso

Estimados señores:

Por medio de la presente ponemos en su conocimiento que, con fecha 31 de julio de 2019, Graña y Montero S.A.A., en calidad de Fideicomitente ha suscrito con La Fiduciaria S.A., en calidad de Fiduciario, un Contrato de Fideicomiso (el “Contrato”) por medio del cual ha transferido en dominio fiduciario a un patrimonio fideicometido No. 1339 (el “Patrimonio Fideicometido”), los derechos de cobro y, consecuentemente, la totalidad de las sumas dinerarias que ustedes se encuentren obligados a pagar por concepto de dividendos a favor de Graña y Montero S.A.A., en su calidad de accionista de GMP S.A.

En tal sentido, de conformidad con lo establecido en el artículo 1215 del Código Civil, les informamos que los derechos a percibir dividendos y los flujos dinerarios por concepto de dividendos que deban ser distribuidos a favor de Graña y Montero S.A.A por concepto de las acciones que ésta mantiene en GMP S.A. han sido cedidos al Patrimonio Fideicometido.

Como consecuencia de ello, los referidos derechos de cobro y flujos dinerarios:

(a) Son de dominio fiduciario de La Fiduciaria S.A., en representación del Patrimonio Fideicometido; y,

(b) Los pagos correspondientes a los referidos derechos de cobro y flujos dinerarios derivados de las acciones que Graña y Montero S.A.A mantiene en GMP S.A. (menos el monto correspondiente a los tributos que deban ser pagados y/o retenidos como consecuencia de su reparto), deberán ser cancelados mediante (i) transferencia bancaria o depósito a la siguiente cuenta [●], abierta a nombre del Patrimonio Fideicometido en [•], [salvo instrucción en contrario por parte del Fideicomisario]; o (ii) mediante cheques de gerencia o cheques certificados emitidos como “no negociable” a la orden del Patrimonio Fideicometido.

Cabe mencionar que toda modificación o suspensión de la forma en que deben efectuarse los pagos de derechos de dividendos, sólo podrá ser instruida mediante comunicación suscrita por La Fiduciaria S.A. En tal sentido, declaramos de manera expresa que, en la eventualidad que Graña y Montero S.A.A, le remita instrucciones sin cumplir con la exigencia antes mencionada, indicando lo contrario, la instrucción de pago contenida en el párrafo anterior se mantendrá plenamente vigente, debiendo continuar efectuando los

Fideicomiso N° 1339 Página 59 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

pagos al Patrimonio Fideicometido administrado por La Fiduciaria S.A. en la forma indicada en el párrafo anterior, sin responsabilidad alguna y considerándose estos pagos –en todos los casos- como correctamente efectuados.

Atentamente,
[Graña y Montero S.A.A.	[La Fiduciaria S.A]
FIDEICOMITENTE	LA FIDUCIARIA

Modelo de comunicación a ADEXUS:

[CARTA NOTARIAL]

Lima, [fecha]

Señores

[●]

[●]

Presente.-

Atención:                [●]

Referencia:            Comunicación de Contrato de Fideicomiso

Estimados señores:

Por medio de la presente ponemos en su conocimiento que, con fecha 31 de julio de 2019, Graña y Montero S.A.A., en calidad de Fideicomitente ha suscrito con La Fiduciaria S.A., en calidad de Fiduciario, un Contrato de Fideicomiso (el “Contrato”) por medio del cual ha transferido en dominio fiduciario a un patrimonio fideicometido No. 1339 (el “Patrimonio Fideicometido”), los derechos de cobro y, consecuentemente, la totalidad de las sumas dinerarias que ustedes se encuentren obligados a pagar por concepto de dividendos a favor de Graña y Montero S.A.A., en su calidad de accionista de Adexus S.A., sujeto al cumplimiento de la condición suspensiva contenida en la Tercera Cláusula Adicional del Contrato (“Condición Suspensiva”) para el caso de las 37,929 representativas del capital social de Adexus S.A. que se encuentran gravadas a favor de terceros en virtud del contrato de prenda mercantil de fecha 17 de agosto de 2018.

En tal sentido, de conformidad con lo establecido en el artículo 1215 del Código Civil Peruano, les informamos que los derechos a percibir dividendos y los flujos dinerarios por concepto de dividendos que deban ser distribuidos a favor de Graña y Montero S.A.A por concepto de las acciones que ésta mantiene en Adexus S.A. han sido cedidos al Patrimonio Fideicometido, y para el caso de las 37,929 representativas del capital social de Adexus S.A. que se encuentran gravadas a favor de terceros en virtud del contrato de prenda mercantil de fecha 17 de agosto de 2018, sujeto al cumplimiento de la Condición Suspensiva.

Como consecuencia de ello, los referidos derechos de cobro y flujos dinerarios:

Fideicomiso N° 1339 Página 60 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

(c) Son y sujeto al cumplimiento de la Condición Suspensiva serán,  según corresponda, de dominio fiduciario de La Fiduciaria S.A., en representación del Patrimonio Fideicometido; y,

(d) Los pagos correspondientes a los referidos derechos de cobro y flujos dinerarios derivados de las acciones que Graña y Montero S.A.A mantiene en Adexus S.A. (menos el monto correspondiente a los tributos que deban ser pagados y/o retenidos como consecuencia de su reparto), deberán ser cancelados mediante (i) transferencia bancaria o depósito a la siguiente cuenta [●], abierta a nombre del Patrimonio Fideicometido en [●], [salvo instrucción en contrario por parte del Fideicomisario]; o (ii) mediante cheques de gerencia o cheques certificados emitidos como “no negociable” a la orden del Patrimonio Fideicometido. Para el caso de las 37,929 representativas del capital social de Adexus S.A. que se encuentran gravadas a favor de terceros en virtud del contrato de prenda mercantil de fecha 17 de agosto de 2018, lo antes señalado será aplicable luego de que se hubiese comunicado el cumplimiento de la Condición Suspensiva.

El cumplimiento de la Condición Suspensiva les será comunicado -por escrito- por La Fiduciaria S.A.

Cabe mencionar que toda modificación o suspensión de la forma en que deben efectuarse los pagos de derechos de dividendos, sólo podrá ser instruida mediante comunicación suscrita por La Fiduciaria S.A. En tal sentido, declaramos de manera expresa que, en la eventualidad que Graña y Montero S.A.A, le remita instrucciones sin cumplir con la exigencia antes mencionada, indicando lo contrario, la instrucción de pago contenida en el párrafo anterior se mantendrá plenamente vigente, debiendo continuar efectuando los pagos al Patrimonio Fideicometido administrado por La Fiduciaria S.A. en la forma indicada en el párrafo anterior, sin responsabilidad alguna y considerándose estos pagos –en todos los casos- como correctamente efectuados.

Atentamente,
[Graña y Montero S.A.A.	[La Fiduciaria S.A]
FIDEICOMITENTE	LA FIDUCIARIA

Fideicomiso N° 1339 Página 61 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

ANEXO 5 - B

Modelo de instrucción irrevocable a [NORVIAL/GYM FEROVIAS]

Lima, [●] de [●] de [●]

Señores

[NORVIAL S.A./GYM FERROVIAS S.A.]

[●]

Presente.-

De nuestra consideración:

GRAÑA Y MONTERO S.A.A. (“GM”), con RUC N° 20332600592, con domicilio real en Av. Paseo de la República N° 4675, distrito de Surquillo, provincia y departamento de Lima; debidamente representada por [●], identificado con DNI N° [●], quien actúa según facultades inscritas en la partida electrónica N° 11028652 del Registro de Personas Jurídicas de la Oficina Registral de Lima; mediante la presente expongo lo siguiente:

Con fecha 31 de julio de 2019, GM celebró un contrato de fideicomiso, en calidad de fideicomitente, con LA FIDUCIARIA S.A. (“LF”), en calidad de fiduciario, y con CS PERU INFRASTRUCTURE HOLDINGS LLC (CS PERU), en calidad de fideicomisario (el “Contrato de Fideicomiso”). El señalado Contrato de Fideicomiso fue celebrado en cumplimiento de las disposiciones recogidas en el contrato denominado Loan Agreement, celebrado con fecha 31 de julio de 2019 entre GM y CS PERU (el Loan Agreement).

En tal sentido, en cumplimiento de las disposiciones recogidas en el Contrato de Fideicomiso y en el Loan Agreement, mediante la presente instruimos de manera irrevocable, a que el pago de toda suma que nos sea adeudada en nuestra calidad de accionistas de [NORVIAL S.A./GYM FERROVIAS S.A.], incluyendo pero sin limitarse a montos derivados de dividendos declarados, distribución de utilidades, reembolso o devolución de capital, en la modalidad que se acuerde mediante junta de accionistas, incluyendo pero sin limitarse a los flujos dinerarios de adelantos de dividendos, reducciones de capital, liberación de reservas, o cualquier otra cuenta que indique una participación en el patrimonio de [NORVIAL S.A./ GYM FERROVIAS S.A.] o participación en el patrimonio neto resultante de la liquidación de [NORVIAL S.A./ GYM FERROVIAS S.A.] que deba hacerse a nuestro favor en nuestra calidad de accionistas de [NORVIAL S.A./ GYM FERROVIAS S.A.], sea efectuado mediante depósito o transferencia bancaria a la siguiente cuenta bancaria, abierta a nombre de LF:

Banco:	[	●]
Número de cuenta:	[	●]
Número de CCI:	[	●]
Moneda de la cuenta:	[	●]

Sin perjuicio de lo mencionado anteriormente, a los montos totales correspondientes a los dividendos declarados, reembolsos o devoluciones de capital antes mencionados, se les deberá restar el monto correspondiente a los tributos que deban ser pagados y/o sean retenidos como consecuencia del reparto de los mismos.

Fideicomiso N° 1339 Página 62 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

Cualquier instrucción en contrario o modificación a los términos establecidos en la presente carta, deberán ser considerados nulos y sin efecto, salvo que cuenten con la firma por escrito de LF.

Sin otro particular, quedamos de ustedes.

Atentamente,

GRAÑA Y MONTERO S.A.A.

Representante: [●]

DNI N° [●]

Fideicomiso N° 1339 Página 63 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

ANEXO 6

Relación de EMPRESAS AUDITORAS

1. Ernst & Young

2. KPM

3. Deloitte

4. BDO Pazos, López de Romaña, Rodríguez S.C.R.L.

5. Price Waterhouse, Dongo-Soria Gaveglio y Asociados S. Civil R. L

6. Moore Stephens

Fideicomiso N° 1339 Página 64 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

ANEXO 7

Modelo de cambio de información de contacto

Lima, [fecha]

Señores

La Fiduciaria S.A.

Calle Los Libertadores 155, Piso 8

San Isidro, Lima

Presente.-

Atención:                 [●]

Referencia:             Fideicomiso N° 1339

Estimados señores:

La presente es con relación al Contrato de Fideicomiso (en adelante, el Contrato) celebrado con fecha 31 de julio de 2019 entre Graña y Montero S.A.A, en calidad de fideicomitente; La Fiduciaria S.A., en calidad de Fiduciario; y CS Peru Infrastructure Holdings LLC, en calidad de Fideicomisario; y, Daniel René Urbina Pérez, en calidad de Depositario (el Contrato).

De conformidad con lo establecido en la Cláusula Décimo Novena del Contrato, por medio de la presente les informamos que se ha modificado el [domicilios, correos electrónicos, teléfonos y/o personas autorizadas para efectuar comunicaciones] establecida(o)s en el mismo.

Respecto de las personas de contacto, adjuntamos copia de sus documentos oficiales de identidad, así como la “Ficha de Registro de Firmas” que se adjunta a la presente.

Sin otro particular, quedamos de ustedes.

Atentamente,

[●]

Fideicomiso N° 1339 Página 65 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

ANEXO 7 (i)

Ficha de Registro de Firmas

 Datos del Fideicomiso

Nombre:                                                                                                                    

Código de Fideicomiso:                                                                                   

Fideicomitente  

 Datos del Contacto

 Considerar que los contactos registrados serán los únicos autorizados a enviar comunicaciones o  instrucciones a La Fiduciaria

Acción	Registrar/Modificar ●	Eliminar  ●	Firma
Apellido Paterno
Apellido Materno
Nombres
Documento de Identidad
Número de Documento
Telefóno (Fijo/Celular)
Correo Electrónico
Acción	Registrar/Modificar ●	Eliminar  ●	Firma
Apellido Paterno
Apellido Materno
Nombres
Documento de Identidad
Número de Documento
Telefóno (Fijo/Celular)
Correo Electrónico
Acción	Registrar/Modificar ●	Eliminar  ●	Firma
Apellido Paterno
Apellido Materno
Nombres
Documento de Identidad
Número de Documento
Telefóno (Fijo/Celular)
Correo Electrónico

Firma de un representante de la empresa

Fideicomiso N° 1339 Página 66 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

ANEXO 8

Relación de Estudios de Abogados

• Estudio Silva

• Estudio Rebaza, Alcázar & De Las Casas

• Estudio Philippi Prietocarrizosa Ferrero DU & Uría

• Estudio Miranda & Amado

• Estudio Echecopar Abogados

• Estudio Hernandez & Compañía Abogado

Fideicomiso N° 1339 Página 67 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

ANEXO 9

Modelo de Minuta Unilateral de Cumplimiento de Condición Suspensiva Venta Adexus

Señor Notario:

Sírvase Usted extender en su registro de escrituras públicas una por la que  conste la Declaración Unilateral de Cumplimiento de Condición Suspensiva (la “Declaración Unilateral de Cumplimiento de Condición Suspensiva”) que otorga LA FIDUCIARIA S.A., con RUC No. 20501842771, con domicilio en calle Los Libertadores No. 155, Piso 8, San Isidro, Lima, debidamente representada por [●], identificado con DNI No. [●], y por [●], identificado con DNI No. [●], según poderes inscritos en los asientos [●] y [●], respectivamente, de la Partida Electrónica No. 11263525 del Registro de Personas Jurídicas de la Oficina Registral de Lima (“La Fiduciaria”).

La presente Declaración Unilateral de Cumplimiento de Condición Suspensiva es otorgada de acuerdo a los términos y condiciones contenidos en las siguientes cláusulas. Los términos en mayúsculas tendrán el significado que se les asigna en el Contrato (conforme este término es definido en el Numeral 1.1 de este documento).

PRIMERA.- ANTECEDENTES

1.1 El 31 de julio de 2019, Graña y Montero S.A.A., en calidad de  FIDEICOMITENTE, La Fiduciaria, en calidad de FIDUCIARIO y CS Peru Infrastructure Holdings LLC, en calidad de Fideicomisario, con la intervención de Daniel René Urbina Pérez, en calidad de depositario, suscribieron un Contrato de Fideicomiso (el “Contrato”). 

1.2 De acuerdo a lo dispuesto en la Segunda Cláusula Adicional del Contrato, la entrada en vigencia y eficacia de la transferencia de los DERECHOS DE COBRO VENTA ADEXUS y los FLUJOS DINERARIOS VENTA ADEXUS, conforme dichos término se definen en el Contrato quedó sujeta a la condición de que LA FIDUCIARIA (en su condición de fiduciaria bajo el CONTRATO DE FIDEICOMISO GM) verifique depósito de cierto monto dinerario en la cuenta bancaria indicada bajo los términos de la Carta de Dispensa de fecha 30 de julio de 2019, suscrita por, entre otros, el FIDEICOMITENTE y los “Local Facility Lenders” (según dicho término se define en el CONTRATO DE PRÉSTAMO), de acuerdo con los términos de dicho contrato (la “Condición Suspensiva”). 

1.3 Conforme a lo indicado en el Contrato, el cumplimiento de la Condición Suspensiva quedaría confirmado por la referida verificación realizada por LA FIDUCIARIA en su condición de fiduciaria del CONTRATO DE FIDEICOMISO GM. 

1.4 Con fecha [●] de [julio] de [2019], La Fiduciaria verificó y  validó depósito de cierto monto dinerario en la cuenta bancaria indicada bajo los términos de la Carta de Dispensa de fecha 30 de julio de 2019. De esta manera, ha quedado verificado el cumplimiento de la Condición Suspensiva. 

SEGUNDA.- OBJETO

Por la presente Declaración Unilateral de Cumplimiento de Condición Suspensiva, La Fiduciaria declara y reconoce que (i) se ha verificado la Condición Suspensiva prevista en

Fideicomiso N° 1339 Página 68 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

la Segunda Cláusula Adicional del Contrato; y, (ii) a partir de la fecha de  verificación por parte de La Fiduciaria ([●] de [julio] de [2019]), la transferencia de los DERECHOS DE COBRO VENTA ADEXUS y los FLUJOS DINERARIOS VENTA ADEXUS ha quedado vigente y surte plenos efectos.

TERCERA.- RATIFICACIÓN DE LOS TÉRMINOS DEL CONTRATO

La Fiduciaria deja constancia de que el presente documento se extiende únicamente para efectos de dar constancia del cumplimiento de la Condición Suspensiva de acuerdo a los términos previstos en la Segunda Cláusula Adicional del Contrato. En ese sentido, La Fiduciaria confirma y ratifica que los términos y condiciones del Contrato son y seguirán siendo el acuerdo válido y aplicable para las PARTES en relación con el CONTRATO.

CUARTA.- LEY APLICABLE

Esta Declaración Unilateral de Cumplimiento de Condición Suspensiva se rige de acuerdo a las leyes de la República del Perú.

QUINTA.- GASTOS

Los gastos de elevación a escritura pública del presente Contrato así como su correspondiente inscripción en los Registros Públicos aplicables serán asumidos por EL FIDEICOMITENTE.

Agregue usted, Sr. Notario, las cláusulas de ley y curse los partes al Registro  Público de Lima para su correspondiente inscripción.

Fideicomiso N° 1339 Página 69 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

ANEXO 10

Modelo de Minuta Unilateral de Cumplimiento de Condición Suspensiva Dividendos Adexus

Señor Notario:

Sírvase Usted extender en su registro de escrituras públicas una por la que conste la Declaración Unilateral de Cumplimiento de Condición Suspensiva (la “Declaración Unilateral de Cumplimiento de Condición Suspensiva”) que otorga LA FIDUCIARIA S.A., con RUC No. 20501842771, con domicilio en calle Los Libertadores No. 155, Piso 8, San Isidro, Lima, debidamente representada por [●], identificado con DNI No. [●], y por [●], identificado con DNI No. [●], según poderes inscritos en los asientos [●] y [●], respectivamente, de la Partida Electrónica No. 11263525 del Registro de Personas Jurídicas de la Oficina Registral de Lima (“La Fiduciaria”).

La presente Declaración Unilateral de Cumplimiento de Condición Suspensiva es otorgada de acuerdo a los términos y condiciones contenidos en las siguientes cláusulas. Los términos en mayúsculas tendrán el significado que se les asigna en el Contrato (conforme este término es definido en el Numeral 1.1 de este documento).

PRIMERA.- ANTECEDENTES

1.5 El 31 de julio de 2019, Graña y Montero S.A.A., en calidad de Fideicomitente, La Fiduciaria, en calidad de fiduciaria y CS Peru Infrastructure Holdings LLC, en calidad de Fideicomisario, con la intervención de Daniel René Urbina Pérez, en calidad de depositario, suscribieron un Contrato de Fideicomiso (el “Contrato”).

1.6 De acuerdo a lo dispuesto en la Tercera Cláusula Adicional del Contrato, la entrada en vigencia y eficacia de la transferencia de los DERECHOS DE COBRO DIVIDENDOS ADEXUS correspondientes a las ACCIONES ADEXUS GRAVADAS y los FLUJOS DINERARIOS DIVIDENDOS ADEXUS correspondientes a las ACCIONES ADEXUS GRAVADAS, conforme dichos término se definen en el Contrato quedó sujeta a la condición de que (i) el FIDEICOMITENTE realice un prepago total del financiamiento garantizado por la PRENDA EXISTENTE; y (ii) la PRENDA EXISTENTE se hubiese levantado, de acuerdo con los términos de dicho contrato (la “Condición Suspensiva”).

1.7 Conforme a lo indicado en el Contrato, el cumplimiento de la Condición Suspensiva será comunicado por el Fideicomisario a La Fiduciaria, de conformidad con lo establecido en la Tercera Cláusula Adicional del Contrato.

1.8 Con fecha [●] de [●] de [2019], el Fideicomisario comunicó a La Fiduciaria el cumplimiento de la Condición Suspensiva. De esta manera, ha quedado verificado el cumplimiento de la Condición Suspensiva.

SEGUNDA.- OBJETO

Por la presente Declaración Unilateral de Cumplimiento de Condición Suspensiva, La Fiduciaria declara y reconoce que (i) se ha verificado la Condición Suspensiva prevista en la Tercera Cláusula Adicional del Contrato; y, (ii) a partir del [●] de [●] de [2019], la

Fideicomiso N° 1339 Página 70 de 71

Calle Los Libertadores 155 Piso 8, San Isidro Teléfono: 710-0660 Fax: 222-4260

transferencia de los DERECHOS DE COBRO DIVIDENDOS ADEXUS correspondientes a las ACCIONES ADEXUS GRAVADAS y los FLUJOS DINERARIOS DIVIDENDOS ADEXUS correspondientes a las ACCIONES ADEXUS GRAVADAS ha quedado vigente y surte plenos efectos.

TERCERA.- RATIFICACIÓN DE LOS TÉRMINOS DEL CONTRATO

La Fiduciaria deja constancia de que el presente documento se extiende únicamente para efectos de dar constancia del cumplimiento de la Condición Suspensiva de acuerdo a los términos previstos en la Tercera Cláusula Adicional del Contrato. En ese sentido, La Fiduciaria confirma y ratifica que los términos y condiciones del Contrato son y seguirán siendo el acuerdo válido y aplicable para las PARTES en relación con el CONTRATO.

CUARTA.- LEY APLICABLE

Esta Declaración Unilateral de Cumplimiento de Condición Suspensiva se rige de acuerdo a las leyes de la República del Perú.

QUINTA.- GASTOS

Los gastos de elevación a escritura pública del presente Contrato así como su correspondiente inscripción en los Registros Públicos aplicables serán asumidos por el Fideicomitente.

Agregue usted, Sr. Notario, las cláusulas de ley y curse los partes al Registro Público de Lima para su correspondiente inscripción.

Fideicomiso N° 1339 Página 71 de 71

Exhibit J

FORM OF FINANCIAL RATIO CERTIFICATE

FINANCIAL RATIO CERTIFICATE

[Date]

CS Peru Infrastructure Holdings LLC and the other

Lenders party to the Loan Agreement referred to

below

c/o Gramercy Funds Management LLC

20 Dayton Avenue

Greenwich, CT 06830

Attention: Tomás Serantes, Ross Rosen

and Joshua O’Melia

Fax: (203) 552-1901

Phone: (203) 552-1900

Email: tserantes@gramercy.com, jomelia@gramercy.com,

and rrosen@gramercy.com

RE: Graña y Montero S.A.A.

Ladies and Gentlemen:

This certificate is delivered to you pursuant to Section 7.01(b) of that certain Loan Agreement, dated as of July 31, 2019 (as amended, restated, amended and restated, supplemented and/or otherwise modified from time to time, the “Loan Agreement”), by and among Graña y Montero S.A.A., a Peruvian sociedad anónima abierta (the “Borrower”), CS Peru Infrastructure Holdings LLC, a Delaware limited liability company (the “Initial Lender”), and the financial institutions party thereto from time to time as Lenders. All capitalized terms used herein shall have the respective meanings specified in the Loan Agreement unless otherwise defined herein.

The undersigned, being chief financial officer of the Borrower, solely on behalf of the Borrower and not in his/her individual capacity, hereby certifies to each of the Lenders as of the end of the most recent Rolling Period that, as demonstrated in parts 1 through 4¹² of Annex A hereto, and

¹  Commencing with the first Financial Ratio Certificate to be delivered in connection with the completion of the first Quarterly Payment Date three (3) months or more following the Closing Date, the calculation of the Consolidated EBITDA to Consolidated Interest Expense Ratio shall be included in each Financial Ratio Certificate.

²  Commencing with the first Financial Ratio Certificate to be delivered after the twelve (12) month anniversary of the Closing Date, the calculations of the Minimum Debt Service Ratio and the Minimum Debt Exposure Ratio shall be included in each Financial Ratio Certificate.

Exhibit J

Page 2

based on the supporting documentation attached hereto as Schedule 1, the Borrower is in compliance with each of the financial covenants set forth in Section 8.10 of the Loan Agreement for the applicable period being measured pursuant to the terms thereof (in each case, the “Measurement Period”).

[Signature page follows]

Exhibit J

Page 3

IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date set forth above.

GRAÑA Y MONTERO S.A.A.
By:
	Name:
	Title:

Exhibit J

Page 4

ANNEX A

FINANCIAL RATIO CALCULATIONS

1.	Leverage Ratio
	i.	Consolidated Indebtedness3
		a.	The Consolidated Indebtedness of the Borrower at the end of the Fiscal Quarter	$
		b.	less the Norvial Holdco Facility Indebtedness4	$
		Consolidated Indebtedness ((a) less (b)):		$
	ii.	Consolidated EBITDA5 (each component as determined in accordance with IFRS)
		a.	The Consolidated net profit of the Borrower for such Measurement Period, plus (to the extent deducted in calculating such net profit)	$
		b.	Financial (expense) income, net, plus	$
		c.	Income tax, plus	$
		d.	Depreciation and amortization, plus	$

³  “Consolidated Indebtedness” shall mean, at the end of each Fiscal Quarter, with respect to the Borrower, Indebtedness of the Borrower on a Consolidated basis, less the Norvial Holdco Facility Indebtedness.

⁴  “Norvial Holdco Facility Indebtedness” shall mean the Acuerdo de Inversión, dated as of May 29, 2018, entered into by and between the Borrower and BCI Perú for an investment in Norvial through the acquisition of all the Class B shares issued by Norvial, as well as the Shareholders Agreement, dated as of June 11, 2018, by and among the Borrower, Inversiones Concesiones Vial S.A.C. and Inversiones en Autopistas.

⁵  “Consolidated EBITDA” for any period, shall mean, with respect to the Borrower on a Consolidated basis, without duplication, net profit plus, to the extent deducted in calculating such net profit, (i) financial (expense) income, net; (ii) income tax; (iii) depreciation and amortization; (iv) the amount corresponding to the tariff for the Line 1 Concession Agreement actually paid to GyM Ferrovias during such period (on account of the Peruvian government’s repayment of amounts invested by GyM Ferrovias to purchase trains and other infrastructure for the Line 1 Concession Agreement); and (v) the portion of costs of sales during such period related to the purchase of land in the Borrower’s real estate segment, in each case determined in accordance with IFRS.

Exhibit J

Page 5

		e.	The amount corresponding to the tariff for the Line 1 Concession Agreement actually paid to GyM Ferrovias for such Measurement Period (on account of the Peruvian government’s repayment of amounts invested by GyM Ferrovias to purchase trains and other infrastructure for the Line 1 Concession Agreement), plus	$
		f.	The portion of costs of sales for such Measurement Period related to the purchase of land in the Borrower’s real estate segment	$
		Equals Consolidated EBITDA:		$
	iii.	Leverage Ratio (the ratio of (a) Consolidated Indebtedness to (b) Consolidated EBITDA)		[        ]:1.00
	iv.	Maximum permitted Leverage Ratio at the end of the Measurement Period		3.50:1.00
	v.	In compliance		[Yes] [No]
2.	Consolidated EBITDA to Consolidated Interest Expense Ratio
	i.	Consolidated EBITDA for the Rolling Period ending on the applicable Quarterly Payment Date		$
	ii.	Consolidated Interest Expense6 for the Rolling Period ending on such Quarterly Payment Date		$
	iii.	Consolidated EBITDA to Consolidated Interest Expense Ratio		[        ]:1.00
	iv.	Minimum Consolidated EBITDA to Consolidated Interest Expense Ratio for the Measurement Period		2.00:1.00
	v.	In compliance		[Yes] [No]

⁶  “Consolidated Interest Expense” for any period, shall mean, with respect to the Borrower on a Consolidated basis, the aggregate interest expense in respect of Indebtedness (including, without limitation, all discounts (including the amortization of original issue discount), non-cash interest payments or accruals, premium payments, fees, commissions and other fees and charges (e.g., fees with respect to letters of credit) and any portion of rent expense with respect to such period under capital leases, in each case to the extent treated as interest (without duplication) in accordance with IFRS, and scheduled net payments under any Hedge Agreement) for such period.

Exhibit J

Page 6

3.	Minimum Debt Exposure Ratio7
	i.	The aggregate amount of the proceeds of the Collection Account Dividends then on deposit in the Dividend Collection Account at the end of the applicable Rolling Period	$
	ii.	The aggregate of all amounts (of principal and interest) in respect of any Obligations due and payable by the Borrower	$
	iii.	Minimum Debt Exposure Ratio	[        ]:1.00
	iv.	Minimum Debt Exposure Ratio for the Measurement Period	[0.35][0.50]:1.008
	v.	In compliance	[Yes] [No]
4.	Minimum Debt Service Ratio9
	i.	The aggregate amount of the proceeds of the Collection Account Dividends deposited in the Dividend Collection Account during the preceding two consecutive Fiscal Quarters of the Borrower most recently ended as of the applicable Quarterly Payment Date	$
	ii.	The aggregate of all amounts (of principal and interest) in respect of any Obligations due and payable by the Borrower for the two immediately succeeding Quarterly Payment Dates following the applicable Quarterly Payment Date	$
	iii.	Minimum Debt Service Ratio	[        ]:1.00
	iv.	Minimum Debt Service Ratio for the Measurement Period	1.50:1.00

⁷  “Minimum Debt Exposure Ratio” shall mean at any time the ratio of (a) the aggregate amount of the proceeds of the Collection Account Dividends then on deposit in the Dividend Collection Account at the end of the applicable Rolling Period to (b) the aggregate of all amounts (of principal and interest) in respect of any Obligations due and payable by the Borrower.

⁸  During the period commencing on the date that is the twelve (12) month anniversary of the Closing Date through and including the date that is the fifteen (15) month anniversary of the Closing Date, the Borrower will not permit, at any time, the Minimum Debt Exposure Ratio to be less than 0.35:1.00 and, (y) thereafter, the Borrower will not permit, at any time, the Minimum Debt Exposure Ratio to be less than 0.50:1.00.

⁹  “Minimum Debt Service Ratio” shall mean at any time the ratio of (a) the aggregate amount of the proceeds of the Collection Account Dividends deposited in the Dividend Collection Account during the preceding two consecutive Fiscal Quarters of the Borrower most recently ended as of the applicable Quarterly Payment Date to (b) the aggregate of all amounts (of principal and interest) in respect of any Obligations due and payable by the Borrower for the two immediately succeeding Quarterly Payment Dates following such date of determination.

Exhibit J

Page 7

v. In compliance [Yes] [No]    

Exhibit J

Page 8

Schedule 1

Supporting Documentation

EX-10.01.1

Exhibit 10.01.1

Execution Version

AMENDMENT, WAIVER AND CONSENT TO THE LOAN AGREEMENT

AMENDMENT, WAIVER AND CONSENT, dated as of February 28, 2020 (the “Amendment, Waiver and Consent”), between GRAÑA Y MONTERO S.A.A., as borrower (the “Borrower”) and CS PERU INFRASTRUCTURE HOLDINGS LLC, as initial lender (the “Initial Lender”) to that certain Loan Agreement, dated as of July 31, 2019 (the “Loan Agreement”), between the Borrower and the Initial Lender. Capitalized terms used herein but not otherwise defined herein shall have the respective meanings given to such terms in the Loan Agreement.

WHEREAS, pursuant to Section 9.09 of the Loan Agreement, the Bankruptcy of any Main Subsidiary constitutes an Event of Default under the terms of the Loan Agreement;

WHEREAS, as of the date hereof, a Bankruptcy has occurred with respect to a Main Subsidiary, Adexus S.A. (“Adexus”), specifically, and as disclosed to the market by the Borrower through a relevant information notice dated November 21, 2019, Adexus entered into bankruptcy proceedings under Chilean law on November 19, 2019, to restructure its outstanding indebtedness (the “Specified Default”);

WHEREAS, pursuant to Section 2.06(b) of the Loan Agreement, after the occurrence and during the continuance of an Event of Default, the Borrower is obligated to pay interest on the then-outstanding principal balance of the Loans (plus any past due amounts not constituting principal) at a per annum interest rate at all times equal to the Default Rate from the date of the occurrence of such Event of Default, through and including the date upon which the Event of Default is cured, waived or otherwise expires or terminates. As of February 28, 2020, the aggregate interest amount of the Specified Default is equal to one hundred ninety six thousand three hundred eighty nine Dollars (US$196,389.00) (the “Accrued Default Interest”);

WHEREAS, the Borrower has requested to modify the definition of Consolidated EBITDA set forth in Section 1.1. of the Loan Agreement, as set forth herein;

WHEREAS, as disclosed to the market by the Borrower through a relevant information notice dated August 26, 2019, the Borrower acknowledged that its former executives and current shareholders Jose Graña Miro Quesada and Hernando Graña Acuña, had initiated a proceeding to enter into a plea bargain agreement with a Governmental Authority in Peru (the “Former Officers Proceeding”);

WHEREAS, considering the information made public regarding the Former Officers Proceeding, the former officers may be disclosing information about the Gasoducto Sur Peruano project (the “GSP Project”) in relation to such proceeding; however, such process is confidential under Peruvian law and the Borrower is not in a position to have true and actual knowledge of such information;

WHEREAS, the Borrower has entered into a preliminary plea bargain agreement with a Governmental Authority in Peru which has in part, due to the risk of the type of information being disclosed under the Former Officers Proceeding, required the Borrower to admit guilt with regard to violation of Anti-Corruption Laws in relation to an investigation into conduct related to the GSP Project, which admission will not be effective until the Borrower’s final plea agreement is signed;

WHEREAS, the Borrower has requested to amend Schedule 6.25 (Anti-Corruption Laws, Sanctions and Anti-Money Laundering Laws) of the Loan Agreement, as set forth herein;

WHEREAS, the Borrower has requested that the Initial Lender (i) provide a waiver in respect of the Specified Default, (ii) consent to the Permitted Voluntary Prepayment (as defined herein), (iii) agree to modify the definition of Consolidated EBITDA set forth in Section 1.1. of the Loan Agreement, and (iv) agree to modify Schedule 6.25 of the Loan Agreement, all in accordance with the terms hereof; and

WHEREAS, the Initial Lender is willing to grant the waiver and consents requested hereto (subject to the terms hereof), and enter into a limited waiver and amendment to the Loan Agreement, solely to the extent contemplated herein;

NOW THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the sufficiency of which is hereby confirmed and accepted by the parties hereto, the parties hereto agree as follows:

1.    Limited Waiver under the Loan Agreement. Notwithstanding anything to the contrary set forth in the Loan Agreement, subject to the conditions set forth in Section 4 hereto, and solely to the extent set forth herein, the Initial Lender hereby agrees to waive the Specified Default, provided that (i) such waiver is subject to all of the terms and conditions set forth in this Amendment, Waiver and Consent; (ii) in no event shall such waiver granted by the Initial Lender in connection to the Specified Default be construed as a waiver of any other breach or default that may have occurred (whether or not known by the Initial Lender) under the Loan Agreement or any other Credit Document; (iii) the waiver set forth in this Section 1 shall not excuse or otherwise waive any failure by the Borrower to comply with any other terms set forth in the Loan Agreement or any other Credit Document; and (iv) the Initial Lender expressly reserves all of its rights, powers, privileges and remedies under the Loan Agreement, the other Credit Documents and/or applicable law. No oral representations or course of dealing on the part of the Initial Lender or any of its officers, employees or agents, and no failure or delay by the Initial Lender with respect to the exercise of any right, power, privilege or remedy under of the Loan Agreement, the other Credit Documents or applicable law shall operate as a waiver thereof, and the single or partial exercise of any such right, power, privilege or remedy shall not preclude any later exercise of any other right, power, privilege or remedy.

2.    Voluntary Prepayment Consent. Notwithstanding anything to the contrary set forth in Section 4.01 of the Loan Agreement, the Initial Lender hereby consents to, and the Borrower hereby agrees to make, as a condition to the effectiveness of this Amendment, Waiver and Consent, a voluntary prepayment of the outstanding Loans, no later than February 28, 2020,

2

in immediate, available funds, in an aggregate principal amount of ten million Dollars (US$10,000,000.00) together with (i) accrued interest in the amount of one hundred fifty one thousand eighty-three Dollars (US$151,083.00); and (ii) a Make-Whole Premium in the amount of two hundred eighty thousand one hundred ninety four Dollars (US$280,194.00) (the payment of all such amounts contemplated in this Section 2, the “Permitted Voluntary Prepayment”).

3.    Limited Amendment to the Loan Agreement. The Borrower and the Initial Lender hereby agree that:

a)    the definition of Consolidated EBITDA set forth in Section 1.1. of the Loan Agreement shall be amended by inserting the following text at the end of such definition, but prior to the period set forth therein: “provided, however, that Consolidated EBITDA shall not include (as part of the calculation of net profit) any impact of non-cash non-recurring events”; and

b)    the list of investigations in Schedule 6.25 (Anti-Corruption Laws, Sanctions and Anti-Money Laundering Laws) shall be amended by inserting the following text at the end of item 3: “4. Investigations of the applicable Governmental Authorities in Peru relating to the Gasoducto Sur Peruano project.”

4.    Conditions to Effectiveness. This Amendment, Waiver and Consent shall become effective only upon the satisfaction of all of the following conditions:

a)    due execution and delivery by each of the Borrower and the Initial Lender of this Amendment, Waiver and Consent;

b)    payment, in immediate, available funds to the Lender Account, of the following amounts: (i) the Default Accrued Interest; (ii) the Permitted Voluntary Prepayment; (iii) an amendment and waiver fee in the amount of two hundred sixty two thousand five hundred Dollars (US$262,500.00); and (iv) any out-of-pocket expenses (including any legal fees, which shall not exceed US$25,000.00) incurred by the Initial Lender to enter into this Amendment, Waiver and Consent.

c)    each of the representations and warranties contained in Section 5 hereto shall be true and correct in all respects.

5.    Representations and Warranties. As of the date hereof and immediately after giving effect to this Amendment, Waiver and Consent and the waiver contemplated hereby, the Borrower hereby represents and warrants to the Initial Lender as follows:

a) this Amendment, Waiver and Consent has been duly authorized, executed and delivered by the Borrower and constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, subject to bankruptcy, insolvency or similar laws affecting secured creditors’ rights generally and to general principles of equity, regardless of whether considered in a proceeding in equity or at law, and the Loan Agreement, after giving effect to this Amendment, Waiver and Consent, constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, subject to bankruptcy, insolvency or similar laws affecting secured creditors’ rights generally and to general principles of equity, regardless of whether considered in a proceeding in equity or at law;

3

b)    the execution and delivery hereof by the Borrower and the performance and observance by the Borrower of the provisions hereof do not violate or conflict with (i) any constituent document of the Borrower or (ii) any requirement of law applicable to the Borrower or result in a breach of any provision of or constitute a default under any contractual obligation of the Borrower; and

c)    no Default or Event of Default, other than the Specified Default, has occurred and is continuing.

6.    Continuing Effect of Loan Agreement.

a)    Except as expressly set forth herein, all of the terms and provisions of the Loan Agreement are and shall remain in full force and effect and are hereby ratified and confirmed.

b)    Other than as explicitly provided herein, the execution, delivery and performance of this Amendment, Waiver and Consent shall not constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Initial Lender under the Loan Agreement or the other Credit Documents. The amendments contained herein are each limited to the specific provisions and circumstances described and shall not be deemed to prejudice any rights not specifically addressed herein which the Initial Lender may now have or may have in the future under the Loan Agreement or the other Credit Documents.

7.    Counterparts. This Amendment, Waiver and Consent may be executed in counterparts and all of the said counterparts taken together shall be deemed to constitute one and the same instrument.

8.    Governing Law. Section 10.08 (Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial) of the Loan Agreement is incorporated herein by reference, mutatis mutandis, as if fully set forth herein.

9.    Section Titles. The section titles contained in this Amendment, Waiver and Consent are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto, except when used to reference a section.

10.    Notices. All communications and notices hereunder shall be given as provided in the Loan Agreement.

11.    Severability. The fact that any term or provision of this Amendment, Waiver and Consent is held invalid, illegal or unenforceable as to any person in any situation in any jurisdiction shall not affect the validity, enforceability or legality of the remaining terms or provisions hereof or the validity, enforceability or legality of such offending term or provision in any other situation or jurisdiction or as applied to any other person.

[Signature pages to follow]

4

IN WITNESS WHEREOF, the parties hereto have caused this Amendment, Waiver and Consent to be duly executed by their respective authorized officers as of the date first above written.

GRAÑA Y MONTERO S.A.A.
By:	/s/ Monica Miloslavich
Name:	Monica Miloslavich
Title:	CFO

/s/ Daniel Urbina

Daniel Urbina

CLO

[Signature page to Amendment, Waiver and Consent]

CS PERU INFRASTRUCTURE HOLDINGS LLC

By:	/s/ BRADSHAW MCKEE
Name:	BRADSHAW MCKEE
Title:	AUTHORIZED SIGNATORY

By:	/s/ JOSHUA O’MELIA
Name:	JOSHUA O’MELIA
Title:	AUTHORIZED SIGNATORY

[Signature page to Amendment, Waiver and Consent]

EX-10.05

Exhibit 10.05

Description of Securities Registered Pursuant to Section 12 of the Exchange Act

Set forth below is certain information relating to our share capital, including brief summaries of certain material provisions of our bylaws, Peruvian Corporate Law and certain other laws and regulations of Peru, all as in effect as of the date hereof.

General

We are a publicly-held corporation under Peruvian Corporate Law and registered with the Public Registry of Corporations in Lima. We are listed on the Lima Stock Exchange and the NYSE.

Our by-laws provide that our principal corporate purposes are to engage in any and all activities related to the construction and real estate businesses; to provide services related to the mining and hydrocarbons industries; to participate in all stages of development of public services and other infrastructure concessions; and to provide management and corporate services to related and third parties. In addition, our company can make investments and corporate transactions, including the acquisition, holding and transfer of securities of Peruvian and foreign companies.

Shareholders’ Liability

Under Peruvian Corporate Law, holders of our common shares cannot vote on matters with respect to which they have a conflict of interest.

Under Article 133 of the Peruvian Corporate Law, a shareholder must abstain from voting when faced with a conflict of interest. A resolution approved in disregard of this provision may be challenged under Article 139 of the Peruvian Corporate Law and the shareholders that participated in the determination in breach of this provision, if their vote was key in attaining the required majority, may be held jointly liable.

Redemption and Rights of Withdrawal

Under Article 200 of the Peruvian Corporate Law, holders of our common shares have redemption rights if: (i) we change our corporate purpose; (ii) a change occurs in the place of organization to a foreign country; or (iii) any transformation, merger or significant spin-off occurs with respect to our company.

Preemptive and Accretion Rights

If we increase our share capital, holders of our common shares have the right to subscribe to new common shares on a pro rata basis. Holders of common shares have preemptive rights in order to maintain their share interest in our share capital, unless the capital increase (i) results from a conversion of debt to common shares, (ii) is approved by shareholders representing at least 40% of the subscribed voting shares provided that the capital increase does not favor, directly or indirectly, certain shareholders to the detriment of others, or (iii) results from a corporate reorganization.

Shareholders who are in default of any payments relating to subscribed but unpaid shares may not exercise their preemptive rights.

Voting Rights and Dividends

Holders of common shares are entitled to one vote per share, with the exception of the election of the board of directors, where each holder is entitled to one vote per share per nominee. Each holder’s votes may be cast for a single nominee or distributed among the nominees at the holder’s discretion. To that effect, each of our common shares gives the holder the right to as many votes as there are directors to be elected. Shareholders may pool votes in favor of one person or distribute them among various persons. Those candidates for the board who receive the most votes are elected directors. Holders of common shares may attend and vote at shareholders’ meetings either in person or through a proxy.

Holders of common shares have the right to participate in the distribution of dividends and shareholder equity resulting from liquidation. Our by-laws do not establish a maximum time limit for the payment of the dividends. However, according to Article 232 of the Peruvian Corporate Law, the right to collect past-due dividends in the case of companies that are publicly held companies, such as ours, expires ten years after the date on which the dividend payment was due.

Our share capital may be increased by a decision of holders of common shares at a shareholders’ meeting. Capital reductions may be voluntary or mandatory and must be approved by holders of common shares at a shareholders’ meeting. Capital reductions are mandatory when accumulated losses exceed 50% of the capital and to the extent such accumulated losses are not offset by accumulated earnings and capital increases within the following fiscal year. Capital increases and reductions must be communicated to the Peruvian Securities Commission, the Lima Stock Exchange and the Peruvian tax authority (SUNAT). Voluntary capital reductions must also be published in the official gazette El Peruano and in a widely circulated newspaper in the city in which we are located.

Liquidation Rights

If we are liquidated, our shareholders have the right to receive net assets resulting from the liquidation, after we comply with our obligation to pay all our creditors and after discounting any existing dividend liabilities. For this reason, we cannot assure that we will be able to reimburse 100% of the book value of the common shares in case of bankruptcy or liquidation.

Ordinary and Extraordinary Meetings

Pursuant to Peruvian Corporate Law and our by-laws, the annual shareholders’ meeting must be held during the three-month period after the end of each fiscal year. Additional shareholders’ meetings may be held during the year. Because we are a publicly-held corporation, we are subject to the special control of the Peruvian Securities Commission, as provided in Article 253 of the Peruvian Corporate Law. If we do not hold the annual shareholders’ meeting during the three-month period after the end of each fiscal year or any other shareholders’ meeting required by our by-laws, a public notary or a competent judge shall call for such a meeting at the request of at least one shareholder of the common shares. Such meeting will take place within a reasonable period of time.

Pursuant to the Peruvian Corporate Law, other shareholders’ meetings are convened by the board of directors when deemed convenient by our company or when it is requested by notarized letter by the holders of at least 5% of our common shares which voting rights are not suspended according to Peruvian Law. Pursuant to section 255 of the Peruvian Corporate Law, if the board expressly or implicitly refuses to convene the shareholders’ meeting, a notary public or a competent judge will call for such meeting at the request of holders of at least 5% of our common shares. If a notary public or competent judge calls for a shareholders’ meeting, the place, date and hour of the meeting, the agenda, the person who will preside the meeting and the notary public who will certify the resolutions of the meeting shall be indicated in the meeting notice. If the meeting called is other than the annual shareholders’ meeting or a shareholders’ meeting required by the Peruvian Corporate Law or the by-laws, the agenda will contain those matters requested by the shareholders who requested the meeting.

Notices of Meetings

Since we are a publicly-held corporation, notice of shareholders’ meetings must be given by publication of a notice. The publication shall occur at least 25 days prior to any shareholders’ meeting in the Peruvian Official Gazette, El Peruano, and in a widely circulated newspaper in the city in which we are located.

Quorum and Voting Requirements

According to Article 33 of our by-laws and Article 257 of the Peruvian Corporate Law, shareholders’ meetings called for the purpose of considering a capital increase or decrease, the issuance of obligations, a change in the by-laws, the sale in a single act of assets with an accounting value that exceeds 50% of our share capital, a merger, division, reorganization, transformation or dissolution, are subject to a first, second and third quorum call, with each of the second and third quorum call to occur upon the failure of the preceding one. A quorum for the first call requires the presence of shareholders holding 50% of our total common shares. For the second call, the presence of shareholders holding at least 25% of our total common shares is adequate, while for the third call there is no quorum requirement. Shareholders’ meetings convened to consider all other matters are subject to a first and second quorum call, with the second quorum call to occur upon the failure of the first quorum.

Decisions by a duly convened shareholders’ meeting require the approval of the majority of the common shares represented at the relevant shareholders’ meeting.

In accordance with Peruvian Corporate Law, only those holders of common shares whose names are registered in our company’s stock ledger not less than 10 days in advance of a meeting will be entitled to attend the shareholders’ meeting and to exercise their rights.

Limitations on the Rights of Non-Residents or Foreign Shareholders

There are no limitations under our by-laws or Peruvian Corporate Law on the rights of non-residents or foreign shareholders to own securities or exercise voting rights with respect to our securities.

Disclosure of Shareholdings and Tender Offer Regulations

Disclosure of Shareholdings

There are no provisions in our by-laws governing the ownership threshold above which share ownership must be disclosed.

However, according to Article 10 of CONASEV Resolution Nº 090-2005-EF-94.10, as amended, we must inform the Peruvian Securities Commission of the members of our economic group, comprised by our subsidiaries, and a list of our holders of common shares owning more than a 5% share interest, as well as any change to such information.

Tender Offer Regulations

Peruvian securities regulations include mandatory takeover rules applicable to the acquisition of control of a publicly held company.

Subject to certain conditions, such regulations generally establish the obligation to launch a tender offer when a person or group of persons acquires a significant interest in a publicly held company. According to the provisions set forth in CONASEV Resolution No. 009-2006-EF-94.10, a person acquires a significant interest in a listed company when such person (i) holds or has the power to exercise directly or indirectly 25%, 50% or 60% of the voting rights in a listed company, or (ii) has the power to appoint or remove the majority of the board members or to amend its by-laws.

A tender offer may be launched prior or following an acquisition of the significant interest. The tender offer may be launched after the “significant interest” is acquired if it is acquired (i) by means of an indirect transaction, defined as a relevant acquisition or interest increase through the acquisition of securities issued by a company that in turn holds share capital of the target company; (ii) as a consequence of a public sale offer, or (iii) in no more than four transactions within a three-year period.

This mandatory procedure has the effect of alerting other shareholders and the market that an individual or financial group has acquired a significant percentage of a company’s voting shares, and gives other shareholders the opportunity to sell their shares at the price offered by the purchaser. The purchaser is required to launch a tender offer unless: (i) shareholders representing 100% of the voting rights consent in writing, (ii) voting shares are acquired by a depositary in order to subsequently issue ADSs, or (iii) voting shares are acquired pursuant to the exercise of preemptive rights.

Changes in Capital

Our by-laws do not establish special conditions to increase or reduce our share capital beyond what is required under Peruvian Corporate Law.

Anti-Takeover Provisions

Our by-laws do not contain any provision that would have the effect of delaying, deferring or preventing a change of control.

Board of Directors

For additional information regarding our board of directors, see “Item 6. Directors, Senior Management and Employees—Directors and Senior Management.”

Form and Transfer

Common shares may be either physical share certificates in registered form or book-entry securities in the CAVALI S.A. ICLV book-entry settlement system also in registered form. Furthermore, in the case of shares represented in book entries, the issuance of new shares which result from share splits or similar corporate events must also be represented in said form.

Furthermore, the Peruvian Corporate Law forbids publicly-held corporations, such as us, from including in their by-laws stipulations limiting the transfer of their shares or restraining their trading in other ways. According to Article 18 of our by-laws, we cannot recognize a shareholders’ agreement that contemplates limitations, restrictions or preferential rights on the transfer of shares, even if such an agreement is recorded in our stock ledger (matrícula de acciones) or in CAVALI. As of the date of this annual report, no shareholders’ agreement is recorded in our stock ledger.

Arbitration

Our by-laws include an arbitration clause applicable to disputes arising from the interpretation of our bylaws or Peruvian Corporate Law and their complementary provisions, among our company, our management and our shareholders. Any such arbitration will be subject to the regulations of the Arbitration Center of the Lima Chamber of Commerce. The material terms of the arbitration clause are as follows:

• any dispute, controversy or claim arising out of the performance and the interpretation of the by-laws and any action or remedy set forth in the Peruvian Corporate Law (Ley General de Sociedades) among us, our current or former shareholders and/or our current or former management shall be settled by arbitration;

• any dispute, controversy or claim between us and a third party shall be also settled by arbitration, if agreed upon by all parties either expressly or tacitly;

• arbitrations shall be conducted before a panel of three arbitrators;

• arbitrators shall consider only the applicable law for their award (arbitration in law and not arbitration in equity);

• each party to a dispute shall appoint an arbitrator within 10 business days from receiving the notice of arbitration. The two selected arbitrators shall appoint the third arbitrator. If one of the parties fails to appoint its arbitrator within 10 business days, the Center of Arbitration of the Lima Chamber of Commerce shall appoint the arbitrator;

• the rules of the Center of Arbitration of the Lima Chamber of Commerce shall apply to the arbitration; and

• the arbitration clause is not applicable to the cases that must be submitted to the jurisdiction of the courts or of the Superintendencia del Mercado de Valores, such as when arbitration would present hardship to minority shareholders or when Peruvian law otherwise requires it.

• The arbitration clause does not apply to claims based on violations of U.S. securities laws.

EX-12.01

Exhibit 12.01

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Luis Francisco Díaz Olivero, certify that:

1. I have reviewed this annual report on Form 20-F of Graña y Montero S.A.A. (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: June 12, 2020

/s/ Luis Francisco Díaz Olivero

Luis Francisco Díaz Olivero

Chief Executive Officer

EX-12.02

Exhibit 12.02

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Mónica Miloslavich, certify that:

1. I have reviewed this annual report on Form 20-F of Graña y Montero S.A.A. (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: June 12, 2020

/s/ Mónica Miloslavich

Mónica Miloslavich

Chief Financial Officer

EX-13.01

Exhibit 13.01

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE U.S. SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Graña y Montero S.A.A. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2019 as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, Luis Francisco Díaz Olivero, Chief Executive Officer, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the U.S. Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(i) the Report fully complies with the requirements of Section 13(a) or 15(d) of the U.S. Securities Exchange Act of 1934; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Luis Francisco Díaz Olivero

Name: Luis Francisco Díaz Olivero

Title: Chief Executive Officer

June 12, 2020

EX-13.02

Exhibit 13.02

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE U.S. SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Graña y Montero S.A.A. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2019, as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, Mónica Miloslavich, Chief Financial Officer, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the U.S. Sarbanes-Oxley-Act of 2002, that to the best of my knowledge:

(i) the Report fully complies with the requirements of Section 13(a) or 15(d) of the U.S. Securities Exchange Act of 1934; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Mónica Miloslavich

Name: Mónica Miloslavich

Title: Chief Financial Officer

June 12, 2020

XML

Financial Instruments - Summary of Financial Assets and Liabilities by Category (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Cash and cash equivalents	S/ 948,978	S/ 801,140	S/ 626,180
Accounts receivable from related parties	36,658	34,903
Lease liability for right-of-use asset	80,216
Bonds	924,042	937,042
Financial liabilities	1,723,108	2,139,714
Financial liabilities at amortised cost, category [member]
Disclosure of detailed information about financial instruments [line items]
Other financial liabilities	695,870	1,169,184
Finance leases	22,980	33,488
Lease liability for right-of-use asset	80,216
Bonds	924,042	937,042
Trade and other accounts payable (excluding non-financial liabilities)	1,364,131	1,453,933
Accounts payable to related parties	61,499	77,790
Financial liabilities	3,148,738	3,671,437
Financial liabilities hedging derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Financial liabilities	52	61
Loans and receivables, category [member]
Disclosure of detailed information about financial instruments [line items]
Cash and cash equivalents	948,978	801,140
Trade accounts receivable and other accounts receivable (excluding financial assets)	1,258,476	1,302,358
Financial assets related to concession agreements	748,365	1,227,994
Accounts receivable from related parties	36,658	813,129
Available-for-sale financial asset	S/ 2,992,477	S/ 4,144,621

XML

Dividends

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Dividends

33 DIVIDENDS

In compliance with certain covenants, the company will not pay dividends for the years 2018 and 2019, except for transactions with non-controlling interests described in Note 35-d).

XML

Workers' Profit Sharing

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Workers' Profit Sharing

25 WORKERS’ PROFIT SHARING

The distribution of the workers’ profit sharing in the income statement for the years ended December 31 is shown below:

	2017		2018		2019
Cost of sales of goods and services		2,215		5,274		4,661
Administrative expenses		7,562		2,588		1,679
		9,777		7,862		6,340

XML

Segment Reporting - Summary of Breakdown by Operating Segments (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Schedule Of Breakdown By Operating Segments [line items]
Revenue	S/ 4,085,004	S/ 3,899,462	S/ 4,014,013
Elimination of intersegment amounts [member]
Schedule Of Breakdown By Operating Segments [line items]
Revenue	(651,492)	S/ (636,882)	S/ (483,405)
Annual Backlog Two Thousand Nineteen [member]
Schedule Of Breakdown By Operating Segments [line items]
Revenue	4,631,981
Annual Backlog Two Thousand Nineteen [member] | Engineering and Construction [member]
Schedule Of Breakdown By Operating Segments [line items]
Revenue	3,018,822
Annual Backlog Two Thousand Nineteen [member] | Infrastructure [member]
Schedule Of Breakdown By Operating Segments [line items]
Revenue	1,837,305
Annual Backlog Two Thousand Nineteen [member] | Real estate [member]
Schedule Of Breakdown By Operating Segments [line items]
Revenue	209,893
Annual Backlog Two Thousand Nineteen [member] | Elimination of intersegment amounts [member]
Schedule Of Breakdown By Operating Segments [line items]
Revenue	S/ (434,039)

XML

Interests on Other Entities - Summary of Group's Major Joint Operations (Detail)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Concesionaria La Chira S.A. [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%	50.00%
Consorcio CDEM [member]
Disclosure of joint operations [line items]
Percentage of interest	85.00%	85.00%	85.00%
Consorcio Huacho Pativilca [member]
Disclosure of joint operations [line items]
Percentage of interest	67.00%	67.00%	67.00%
Consorcio GyM Conciviles [member]
Disclosure of joint operations [line items]
Percentage of interest	67.00%	67.00%	67.00%
Consorcio AMDP norte [member]
Disclosure of joint operations [line items]
Percentage of interest		50.00%	50.00%
Consorcio Chicama Ascope [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%	50.00%
Consorcio Constructor Alto Cayma [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%	50.00%
Consorcio Energia y Vapor [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%	50.00%
Consorcio Ermitano [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%	50.00%
Consorcio GyM Sade Skanska [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%	50.00%
Consorcio GyM-OSSA [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%
Consorcio GyM-Stracon [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%
Consorcio HV GyM [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%	50.00%
Consorcio La Chira [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%	50.00%
Consorcio Lima Actividades Comerciales Sur [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%	50.00%
Consorcio Lima Actividades Sur [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%	50.00%
Consorcio Menegua [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%	50.00%
Consorcio para la Atencion y Mantenimiento de Ductos [member]
Disclosure of joint operations [line items]
Percentage of interest		40.00%	40.00%
Consorcio Rio Mantaro [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%	50.00%
Consorcio Rio Urubamba [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%	50.00%
Consorcio TNT Vial y Vives - DSD Chile LTDA [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%	50.00%
Constructora Incolur DSD Limitada [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%	50.00%
Consorcio Alto Cayma [member]
Disclosure of joint operations [line items]
Percentage of interest	49.00%	49.00%	49.00%
Consorcio La Gloria [member]
Disclosure of joint operations [line items]
Percentage of interest	49.00%	49.00%	49.00%
Consorcio Norte Pachacutec [member]
Disclosure of joint operations [line items]
Percentage of interest	49.00%	49.00%	49.00%
Consorcio Italo Peruano [member]
Disclosure of joint operations [line items]
Percentage of interest	48.00%	48.00%	48.00%
Consorcio Vial Quinua [member]
Disclosure of joint operations [line items]
Percentage of interest	46.00%	46.00%	46.00%
Consorcio Constructor Ductos del Sur [member]
Disclosure of joint operations [line items]
Percentage of interest	29.00%	29.00%	29.00%
Consorcio Constructor Chavimochic [member]
Disclosure of joint operations [line items]
Percentage of interest	27.00%	27.00%	27.00%
Consorcio Vial ICAPAL [member]
Disclosure of joint operations [line items]
Percentage of interest	10.00%	10.00%	10.00%
Consorcio Terminales [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%	50.00%
Terminales del Peru [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%	50.00%
Consorcio Ancon-Pativilca [member]
Disclosure of joint operations [line items]
Percentage of interest	67.00%	67.00%	67.00%
Consorcio Peruano de Conservacion [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	50.00%	50.00%
Consorcio Manperan [member]
Disclosure of joint operations [line items]
Percentage of interest	67.00%	67.00%	67.00%
Consorcio Vial Sierra [member]
Disclosure of joint operations [line items]
Percentage of interest	50.00%	100.00%	50.00%
Consorcio Vial Ayahuaylas [member]
Disclosure of joint operations [line items]
Percentage of interest	99.00%	99.00%	99.00%
Consorcio Vial Sullana [member]
Disclosure of joint operations [line items]
Percentage of interest	99.00%	99.00%	99.00%
Consorcio Vial del Sur [member]
Disclosure of joint operations [line items]
Percentage of interest	99.00%	99.00%	99.00%
Consorcio Panorama [member]
Disclosure of joint operations [line items]
Percentage of interest			35.00%
Consorcio vial la concordia [member]
Disclosure of joint operations [line items]
Percentage of interest	88.00%	88.00%	88.00%
Consorcio GMI Haskoningdhv [Member]
Disclosure of joint operations [line items]
Percentage of interest	70.00%	70.00%
Consorcio Supervisor Ilo [member]
Disclosure of joint operations [line items]
Percentage of interest	55.00%	55.00%	55.00%
Consorcio Poyry-GMI [member]
Disclosure of joint operations [line items]
Percentage of interest	40.00%	40.00%	40.00%
Consorcio Internacional Supervision Valle Sagrado [member]
Disclosure of joint operations [line items]
Percentage of interest	33.00%	33.00%	33.00%
Consorcio Ecotec GMI PIM [Member]
Disclosure of joint operations [line items]
Percentage of interest	30.00%	30.00%
Consorcio Ribereo Chinchaycamac [Member]
Disclosure of joint operations [line items]
Percentage of interest	40.00%

XML

Tax Situation

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Tax Situation

29 TAX SITUATION

a) Each company in the Group is individually subject to the applicable taxes in Peru, Chile and Colombia. Management considers that it has determined the taxable income under general income tax laws in accordance with the tax legislation current effective of each country.

b) Changes in the Income Tax Law in Colombia—

With the entry into force of the law 2010 of December 2019 law of economic growth, employment, investment, strengthening of public finances and the progressivity, equity and efficiency of the tax system, the following was stipulated as of January 1 2020:

It is supposed that the liquid income is not less than 3.5% of its liquid assets of the previous year. The percentage of presumptive income will be reduced to 0.5% by 2020 and 0% from 2021.

The income tax rate applicable to national societies, permanent establishments and foreign legal entities will be 32%, 31% and 30% for the periods 2020,2021 and 2022, respectively.

Individuals or corporation taxpayers who receive income from foreign sources subject to income in the country of origin, can deduct the tax paid abroad from this income.

Payments abroad for interest, commissions, fees, royalties, leases, personal services are subject to withholding tax at the rate of 20%. Payments for consulting, technical services and technical assistance provided by non-residents are subject to the 20% withholding tax rate. Payments for financial returns to non-residents are subject to the 15% withholding tax rate. Payments to the parent company for management fee, are subject to the 33% withholding tax rate. 

Taxpayers may correct their tax returns within three (3) years after the closing date of tax submits and before they have been notified of a special requirement.

The statute of limitations for income taxpayers who compensate for tax losses or are subject to transfer prices will be five (5) years.

In case of an increase in taxable income of 30% with respect to the previous year, for fiscal years 2020 and 2021, the statute of limitation of the returns would be six (6) months and in the case of a 20% increase year will be close at month twelve (12).

c) The income tax expense shown in the consolidated statement of income comprises:

	2017			2018			2019
Current income tax		168,143			150,020			113,062
Deferred income tax (Note 24)		(44,550	)		(23,594	)		206,895
PPUA		613			—			—
		124,206			126,426			319,957
(-) Discontinued Operations		(77,901	)		(13,108	)
Income tax expense		46,305			113,318			319,957

d) The Group’s income tax differs from the theoretical amount that would have resulted from applying the weighted-average income tax rate applicable to the profit reported by of the consolidated companies, as follows:

	2017			2018			2019
Profit (loss) before income tax		45,112			133,948			(474,726	)
Income tax by applying local applicable tax rates on profit generated in the respective countries		13,811			40,507			(141,370	)
Tax effect on:
- Reversal of deferred income tax asset		—			—			174,716
- Non-recoverable item		—			—			85,301
- Non-deductible expenses		30,472			70,052			84,832
- Unrecognized deferred income tax asset		1,562			8,592			82,424
- Change in prior years estimations		9,005			3,235			36,529
- Provision of tax contingencies		—			—			7,079
- Adjustment for changes in rates of income tax		27			1,524			622
- PPUA adjustment for changes in tax rates		(611	)		—			—
- Non-taxable income		(4	)		(1,691	)		(1,195	)
- Equity method (profit) loss		394			(1,094	)		(64	)
- Others		(8,351	)		(7,807	)		(8,917	)
Income tax		46,305			113,318			319,957

e) The theoretical tax disclosed is the result of applying the income tax rate in accordance with the tax legislation of the country where each company that is part of the Group is domiciled. In this sense, companies domiciled in Peru, Chile, and Colombia applied in 2019 income tax rates of 29.5%, 27% and 33% respectively (29.5%, 27% and 37% for 2018). Norvial S.A., GyM Ferrovias S.A., Concesionaria Via Expresa Sur S.A. and GMP S.A. (Blocks III and IV) have legal stability contracts signed with the Peruvian Government in force during the term of the associated concessions. Therefore, the consolidated theoretical amount is obtained from the weighting of the profit or loss before income tax and the applicable income tax rate.

Country	Rates Taxes local Applicable			Utility before the Tax to Rent			Tax to rent
	(A)			(B)			(A)*(B)
2017
Perú		28.00	%		420,421			124,024
Perú – Norvial S.A.		27.00	%		68,104			18,388
Perú – GyM Ferrovías S.A.		30.00	%		29,028			8,708
Peru – Vía Expresa Sur S.A.		30.00	%		779			234
Perú – GMP S.A.		30.00	%		20,941			6,073
Chile		24.00	%		(93,031	)		(23,723	)
Colombia		40.00	%		(27,970	)		(11,188	)
Bolivia		25.00	%		(2,897	)		(724	)
Unrealized gains					(370,263	)		(107,981	)
Total					45,112			13,811
2018
Peru		29.50	%		151,627			44,730
Peru – Norvial S.A.		27.00	%		21,104			5,698
Peru – GyM Ferrovías S.A.		30.00	%		125,136			37,541
Peru – Vía Expresa Sur S.A.		30.00	%		2,951			885
Peru – GMP S.A.		29.00	%		35,421			10,272
Chile		27.00	%		(20,768	)		(5,607	)
Colombia – Morelco S.A.		37.00	%		11,851			4,385
Colombia – GyM S.A. Branch		33.00	%		1,984			655
Bolivia		25.00	%		(137	)		(34	)
Unrealized gains					(195,221	)		(58,018	)
					133,948			40,507
2019
Peru		29.50	%		(1,612,192	)		(475,597	)
Peru – Norvial S.A.		27.00	%		24,066			6,498
Peru – GyM Ferrovías S.A.		30.00	%		121,080			36,324
Peru – Vía Expresa Sur S.A.		30.00	%		(17,752	)		(5,326	)
Peru – GMP S.A.		29.00	%		35,421			10,272
Chile		27.00	%		(36,917	)		(9,967	)
Colombia – GyM S.A. Branch		33.00	%		(11,824	)		(3,902	)
Bolivia		25.00	%		681			170
Unrealized gains					1,022,711			300,158
					(474,726	)		(141,370	)

In 2018, Colombia applied a 33% Income Tax rate and a 4% temporary surcharge on a taxable income greater than S/895 thousand (equivalent to COP800 million). The two subsidiaries domiciled in Colombia determined taxable income that generated the application of income tax rates of 37% and 33%.

f) Peruvian tax authorities have the right to examine, and, if necessary, amend the income tax determined by the Company in the last four years - from January 1 of the year after the date when the tax returns are filed (open fiscal year). Therefore, the years 2015 through 2019 are subject to examination by the tax authorities. Management considers that no significant liabilities will arise as a result of these possible tax examinations. Additionally, income tax returns for fiscal years 2017 to 2019 remain open for examination by the Chilean tax authorities who have the right to carry out said examination within the three years following the date the income tax returns had been filed. Fiscal years 2016 to 2019 are open for tax audit by Colombian tax authorities. Colombian tax authorities are entitled to audit two consecutive years following the date the income tax returns were filed.

g) In accordance with current legislation, for determination of income tax and general sales tax, the transfer prices transactions with related companies and companies resident in territories with low or no taxation must be considered. For this purpose, documentation and information must be available to support the valuation methods used and the criteria considered for their determination (transfer pricing rules). The Tax Administration is authorized to request this information from the taxpayer. Based on the analysis of the Company’s operations, Management and its legal advisors estimate that the transfer prices of transactions with related companies are based on market conditions, similar to those agreed with third parties, at 31 December 2019.

h) Temporary tax on net assets (ITAN)

The temporary tax on net assets is applied by the companies which operate in Peru, to third category income generators subject to the Peruvian Income Tax General Regime. Effective the year 2012, the tax rate is 0.4%, applicable to the amount of the net assets exceeding S/1 million.

The amount effectively paid may be used as a credit against payments on account of income tax or against the provisional tax payment of the income tax of the related period.

i) The recoverability of the deferred income tax asset registered in Negocios del Gas at the end of 2018, related to the impairment of investments in GSP has been evaluated, finally ending in a write-off of S/172 million.

j) In 2019, certain operations have not been recognized to have impact on income tax such as: additional impairment of investments in GSP (Negocios del Gas S.A.) S/67 million, impairment of accounts receivable in GyM S.A. amount to S/7.7 million and work in progress in Concesionaria Vía Expresa Sur S.A. and Promotora Larcomar S.A. equal to S/10.8 million.

k) The current income tax payable, after applying the corresponding tax credits and whose due date is up to the first week of April of the following year, includes mainly:

–	GyM Ferrovias S.A.	S/7 million in 2019 and S/20 million in 2018
–	Inmobiliaria Almonte S.A.	S/10 million in 2018

XML

Trade Accounts Receivables, Net

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Trade Accounts Receivables, Net

10 TRADE ACCOUNTS RECEIVABLES, NET

At December 31, this account comprises:

	Total						Current						Non-current
	2018			2019			2018			2019			2018		2019
Receivables (a)		1,376,517			923,316			827,611			380,135			548,906		543,181
Unbilled receivables - Subsidiaries (b)		79,847			421,841			79,847			336,272			—		85,569
Unbilled receivables - Concessions (c)		584,174			234,688			113,013			110,236			471,161		124,452
		2,040,538			1,579,845			1,020,471			826,643			1,020,067		753,202
Impairment of account receivables		(12,643	)		(4,906	)		(12,643	)		(4,906	)		—		—
		2,027,895			1,574,939			1,007,828			821,737			1,020,067		753,202

a) The non-current portion of commercial receivables is mainly related to the financial asset model (Note 2.5) of the subsidiary GyM Ferrovias S.A. whose fair values of the non-current portion of commercial receivables amount to S/1,013 million (S/1,060 million as of December 31, 2018), these values are based on discounted cash flows using rates of 7.70% (7.33% as of December 31, 2018).

The ageing of the receivables net of impairment are detailed as follows:

	2018		2019
Current		890,100		802,341
Past due up to 30 days		259,062		28,216
Past due from 31 days up to 180 days		28,575		21,490
Past due from 181 days up to 360 days		152,732		28,327
Past due over 360 days		33,405		38,036
		1,363,874		918,410

b) The unbilled receivables by subsidiaries are documents related to the estimates of the degree of progress for services rendered that were not billed, according detail:

	2018		2019
GYM S.A.		14,455		384,660
Concar S.A.		38,770		10,737
GMI S.A.		26,622		24,787
GMP S.A.		—		1,657
		79,847		421,841

Below are the unbilled receivables by the subsidiaries grouped by the main projects:

	2018		2019
Infrastructure
Operation and maintenance of roads		38,066		9,837
Oil services		—		1,657
Others		703		901
		38,769		12,395
Engineering and Construction
Talara Refinery		—		190,831
North Concentrator Plant - Quellaveco		—		52,488
Oxide Plant - Marcobre		—		26,658
Civil works, assembly and electromechanics - Acero Arequipa		—		16,449
Project Mina Gold Fields La Cima S.A.		11,980		3,409
Generating Plant Machu Picchu		—		13,098
Others		29,098		106,513
		41,078		409,446
		79,847		421,841

c) The unbilled receivables – Concessions, corresponds to future collections for public services granted according to detail below:

	2018		2019
Linea 1 - Metro de Lima		558,179		208,205
Operation and maintenance of roads		25,397		25,315
Others		598		1,168
		584,174		234,688

In 2019, Management recognized in the period an impairment in trade accounts receivable for S/1 million (S/3.10 million in 2018). The maximum exposure to credit risk at the reporting date is the carrying amount of accounts receivable and work in progress (Note 11).

XML

Trade Accounts Receivables, Net - Summary of Unbilled Receivables Concessions Corresponds to Future Collections for Public Services Granted According (Detail) - Unbilled Receivables Concessions [Member] - Service concession rights [member] - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable	S/ 234,688	S/ 584,174
Linea 1 - Metro de Lima [member]
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable	208,205	558,179
Operation and maintenance of roads [Member]
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable	25,315	25,397
Others [member]
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable	S/ 1,168	S/ 598

XML

Transactions with Related Parties and Joint Operators - Additional Information (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of transactions between related parties [line items]
Key management personnel compensation	S/ 87,400	S/ 58,000	S/ 90,500
Accounts receivable from related parties	S/ 546,941	S/ 778,226
Discount rate	7.70%	7.33%
Gasoducto Sur Peruano [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	S/ 331,000
Discount rate	3.46%
Discounted Value	S/ 57,000	S/ 17,800
GyM S.A. [member]
Disclosure of transactions between related parties [line items]
Impairment loss		31,000
Consorcio Constructor Ductos del Sur [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	270,000
Discontinued operations [member]
Disclosure of transactions between related parties [line items]
Key management personnel compensation	S/ 400	S/ 400	S/ 25,600

XML

Interest in Other Entities

12 Months Ended

Dec. 31, 2019

Investments accounted for using equity method [abstract]

Interest in Other Entities

6. INTERESTS IN OTHER ENTITIES

The consolidated financial statements include the accounts of the Group and its subsidiaries. Additionally, the consolidated financial statements of the Group include its interest in joint operations in which the Company or certain subsidiaries have joint control with their partners (Note 2.2-d).

a) Main subsidiaries

The following table shows the principal direct and indirect subsidiaries classified by operating segment (Note 7):

Name	Country	Economic activity
Engineering and Construction:
GyM S.A.	Peru, and Colombia	Civil construction, electro-mechanic assembly, buildings management and implementing housing development projects and other related services.
GyM Chile S.p.A.	Chile	Investment funds, investment companies and similar financial entities.
Vial y Vives - DSD S.A.	Chile	Construction engineering projects, civil construction and related technical consultancy, rental of agricultural machinery and equipment, forestry, construction and civil engineering without operator.
GMI S.A.	Peru, Mexico, and Bolivia	Advisory and consultancy services in engineering, carrying out studies and projects, managing projects and supervision of works.
Morelco S.A.S.	Colombia and Ecuador	Providing construction and assembly services, supply of equipment and materials, operation and maintenance and engineering services in the specialties of mechanics, instrumentation and civil works.
Infrastructure:
GMP S.A.	Peru	Oil and oil by-products extraction, operation and exploration services, as well as providing storage and fuel dispatch services.
Oiltanking Andina Services S.A.	Peru	Operation of the gas processing plant of Pisco - Camisea.
Transportadora de Gas Natural Comprimido Andino S.A.C.	Peru	Supply, process and market natural gas and its derivative products.
Concar S.A.	Peru	Highway and roads concessions operation and maintenance.
GyM Ferrovias S.A.	Peru	Concession for the operation of the public transportation system of Lima Metro (Metro de Lima Metropolitana).
Survial S.A.	Peru	Concession for constructing, operating and maintaining Section 1 of the “Southern Inter-oceanic” highway.
Norvial S.A.	Peru	Concession for restoring, operating and maintaining the “Ancon - Huacho - Pativilca” section of the Panamericana Norte road.
Concesion Canchaque S.A.C.	Peru	Concession for operating and maintaining of the Buenos Aires – Canchaque provincial road highway.
Concesionaria Via Expresa Sur S.A.	Peru	Concession for designing, constructing, operating and maintaining the Via Expresa - Paseo de la Republica in Lima.
Real estate:
VIVA GyM S.A.	Peru	Developing and managing real estate projects directly or together with other partners.
Parent company operation:
Adexus S.A.	Chile, Peru, Colombia and Ecuador	IT solutions services.
CAM Holding S.p.A.	Chile	Investment company.
Qualys S.A.	Peru	Human, economic and technological services to the Group’s companies.
Promotora Larcomar S.A.	Peru	Building a hotel complex on a plot of land located in the district of Miraflores.
Promotores Asociados de Inmobiliarias S.A.	Peru	Operating in the real-estate industry and engaged in the development and sale of office premises in Peru.
Negocios del Gas S.A.	Peru	Investment company for construction, operation, and maintenance of the pipeline system to transport natural gas and liquids.
Inversiones en Autopistas S.A.	Peru	Holding company of shares, participation or any other credit instrument or investment document.

The following table shows the Group’s subsidiaries and related interest as of December 31, 2019:

	Percentage of common shares directly held by Parent (%)			Percentage of common shares held by Subsidiaries (%)			Percentage of common shares held by the Group (%)			Percentage of common shares held by non-controlling interests (%)
Engineering and Construction:
GyM S.A.		98.87	%		—			98.87	%		1.13	%
- Morelco S.A.S.		—			70.00	%		70.00	%		30.00	%
- GyM Chile S.p.A.		—			100.00	%		100.00	%		—
- Vial y Vives – DSD S.A.		—			94.49	%		94.49	%		5.51	%
GMI S.A.		89.41	%		—			89.41	%		10.59	%
- Ecología Tecnología Ambiental S.A.C.		—			100.00	%		100.00	%		—
- GM Ingenieria y Construcción de CV		—			99.00	%		99.00	%		1.00	%
- GM Ingenieria Bolivia S.R.L.		—			98.57	%		98.57	%		1.43	%
Infrastructure:
GMP S.A.		95.00	%		—			95.00	%		5.00	%
- Oiltanking Andina Services S.A.		—			50.00	%		50.00	%		50.00	%
- Transportadora de Gas Natural Comprimido Andino S.A.C.		—			99.93	%		99.93	%		0.07	%
Concar S.A.		100.00	%		—			100.00	%		—
GyM Ferrovias S.A.		75.00	%		—			75.00	%		25.00	%
Survial S.A.		100.00	%		—			100.00	%		—
Norvial S.A.		18.20	%		48.80	%		67.00	%		33.00	%
Concesión Canchaque S.A.		99.96	%		0.04	%		100.00	%		—
Concesionaria Vía Expresa Sur S.A.		99.98	%		0.02	%		100.00	%		—
Real Estate:
Viva GyM S.A.		56.22	%		43.32	%		99.54	%		0.46	%
Parent company operations:
Qualys S.A ( Previously Generadora Arabesco S.A.)		100.00	%		—			100.00	%		—
Promotora Larcomar S.A.		46.55	%		—			46.55	%		53.45	%
Negocios del Gas S.A.		99.99	%		0.01	%		100.00	%		—
Agenera S.A.		99.00	%		1.00	%		100.00	%		—
Inversiones en Autopistas S.A.		1.00	%		99.00	%		100.00	%		—
Cam Holding S.p.A.		100.00	%		—			100.00	%		—
Adexus S.A.		100.00	%		—			100.00	%		—

The following table shows the Group’s subsidiaries and related interest as of December 31, 2018:

	Percentage of common shares directly held by Parent (%)			Percentage of common shares held by Subsidiaries (%)			Percentage of common shares held by the Group (%)			Percentage of common shares held by non-controlling interests (%)
Engineering and Construction:
GyM S.A.		98.24	%		—			98.24	%		1.76	%
- Morelco S.A.S.		—			70.00	%		70.00	%		30.00	%
- GyM Chile S.p.A.		—			94.49	%		99.99	%		0.01	%
- Vial y Vives – DSD S.A.		—			94.49	%		94.49	%		5.51	%
GMI S.A.		89.41	%		—			89.41	%		10.59	%
- Ecología Tecnología Ambiental S.A.C.		—			—			99.99	%		0.01	%
- GM Ingenieria y Construcción de CV		—			—			99.00	%		1.00	%
- GM Ingenieria Bolivia S.R.L.		—			—			99.00	%		1.00	%
Infrastructure:
GMP S.A.		95.00	%		—			95.00	%		5.00	%
- Oiltanking Andina Services S.A.		—			50.00	%		50.00	%		50.00	%
- Transportadora de Gas Natural Comprimido Andino S.A.C.		—			99.93	%		99.93	%		0.07	%
Concar S.A.		99.99	%		—			99.99	%		0.01	%
GyM Ferrovias S.A.		75.00	%		—			75.00	%		25.00	%
Survial S.A.		99.99	%		—			99.99	%		0.01	%
Norvial S.A.		67.00	%		—			67.00	%		33.00	%
Concesión Canchaque S.A.		99.96	%		—			99.96	%		0.04	%
Concesionaria Vía Expresa Sur S.A.		99.98	%		0.02	%		100.00	%		—
Real Estate:
Viva GyM S.A.		63.44	%		36.10	%		99.54	%		0.46	%
Parent company operations:
Qualys S.A (Previously Generadora Arabesco S.A.)		99.00	%		—			99.00	%		1.00	%
Promotora Larcomar S.A.		46.55	%		—			46.55	%		53.45	%
Negocios del Gas S.A.		99.99	%		0.01	%		100.00	%		—
Agenera S.A.		99.00	%		1.00	%		100.00	%		—
Inversiones en Autopistas S.A.		100.00	%		—			—			—
Cam Holding S.p.A.		100.00	%		—			100.00	%		—
Adexus S.A.		99.99	%		0.01	%		100.00	%		—

All investments in subsidiaries have been included in the consolidation. The proportion of voting rights in such subsidiaries is held directly by the Company and does not differ significantly from the proportion of shares held.

In June 2018, the Company expanded its shareholding to 100% of the subsidiary Adexus S.A. (Note 32-a).

In 2018, the subsidiary Cam Servicios del Perú S.A. was sold, as well as the following indirect subsidiaries: i) Stracon GyM S.A. through GyM S.A. and ii) Cam Chile S.p.A., through Cam Holding S.p.A. In that year, these investments were deconsolidated by the Company, and their operations are shown in Note 36.

As of December 31, the non-controlling interest is attributed to the following subsidiaries:

	2018		2019
Viva GyM S.A. and subsidiaries		168,612		168,839
GyM S.A. and subsidiaries		67,639		61,569
Norvial S.A.		65,918		63,031
GMP S.A.		23,424		24,413
GyM Ferrovias S.A.		55,986		77,564
Promotora Larcomar S.A.		13,121		3,058
Other		6,871		(199	)
		401,571		398,275

In December 2019, the subsidiary Viva GyM S.A. through the General Shareholders’ Meeting, agreed to capitalize its supplementary premium for the amount of S/65.3 million to subsequently reduce the share capital in a non-proportional manner by returning contributions amounting to S/82.3 million. The return did not generate cash outflow as the reciprocal obligations between its shareholders with the subsidiary were offset. Consequently, the Company modified its participation in its subsidiary from 63.4% to 56.2%, in turn its subsidiary GyM S.A. (also a shareholder of Viva GyM S.A.) modified its stake from 36.1% to 43.3%.

In addition, in December 2019 the subsidiary GyM S.A. through the General Shareholders’ Meeting agreed to the capital increase for monetary contributions in the amount of S/146.1 million. Minority shareholders voluntarily waived the pre-emptive subscription right, causing the Company’s participation percentage to increase from 98.2% to 98.9%.

Summarized financial information of subsidiaries with material non-controlling interests

Set out below is the summarized financial information for each subsidiary that has non-controlling interests that are material to the Group.

Summarized statement of financial position

	Viva GyM S.A. and subsidiaries						GyM S.A. and subsidiaries						Norvial S.A.						GyM Ferrovías S.A.
	At December 31,						At December 31,						At December 31,						At December 31,
	2018			2019			2018			2019			2018			2019			2018			2019
Current:
Assets		720,976			591,402			1,262,588			1,232,486			109,778			84,889			534,148			449,180
Liabilities		(310,132	)		(263,592	)		(1,467,953	)		(1,491,747	)		(66,506	)		(53,715	)		(563,081	)		(93,879	)
Current net assets (liabilities)		410,844			327,810			(205,365	)		(259,261	)		43,272			31,174			(28,933	)		355,301
Non-current:
Assets		98,504			121,529			980,653			1,100,218			462,739			442,186			974,688			623,033
Liabilities		(37,154	)		(37,851	)		(413,026	)		(486,924	)		(306,261	)		(282,358	)		(716,946	)		(668,080	)
Non-current net assets (liabilities)		61,350			83,678			567,627			613,294			156,478			159,828			257,742			(45,047	)
Net assets		472,194			411,488			362,262			354,033			199,750			191,002			228,809			310,254

Summarized income statement    

	Viva GyM S.A. and subsidiaries						GyM S.A. and subsidiaries						Norvial S.A.						GyM Ferrovías S.A.
	For the year ended						For the year ended						For the year ended						For the year ended
	2018			2019			2018			2019			2018			2019			2018			2019
Revenue		630,130			264,401			1,704,998			2,279,786			163,117			272,679			577,993			397,853
Profit (loss) before income tax		226,945			30,729			(154,452	)		(116,081	)		21,104			24,067			116,822			121,079
Income tax		(69,166	)		(7,000	)		18,559			(30,843	)		(3,885	)		(6,815	)		(35,524	)		(39,634	)
Profit (loss) for the year		157,779			23,729			(135,893	)		(146,924	)		17,219			17,252			81,298			81,445
Discontinued operations		—			—			44,096			—			—			—			—			—
Other comprehensive income		—			—			(14,061	)		(7,436	)		—			—			—			—
Total comprehensive income for the year		157,779			23,729			(105,858	)		(154,360	)		17,219			17,252			81,298			81,445
Dividends paid to non-controlling interest (Note 35-d)		84,870			—			4,241			—			8,184			8,580			—			—

Summarized statement of cash flows

	Viva GyM S.A. and subsidiaries						GyM S.A. and subsidiaries						Norvial S.A.						GyM Ferrovías S.A.
	For the year ended						For the year ended						For the year ended						For the year ended
	2018			2019			2018			2019			2018			2019			2018			2019
Net cash provided from operating activities		259,992			28,791			148,754			(25,502	)		70,939			12,514			(161,318	)		379,882
Net cash (applied to) provided from investing activities		(8,460	)		(2,613	)		233,150			(20,173	)		(2	)		(33	)		1,928			2,845
Net cash (applied to) provided from financing activities		(255,979	)		(58,722	)		(388,836	)		209,514			(43,536	)		(46,045	)		189,495			(273,009	)
(Decrease) increase in cash and cash equivalents, net		(4,447	)		(32,544	)		(6,932	)		163,839			27,401			(33,564	)		30,105			109,718
Cash and cash equivalents at the beginning of the year		97,709			93,262			179,560			172,628			72,449			99,850			161,073			191,178
Cash and cash equivalents at the end of the year		93,262			60,718			172,628			336,467			99,850			66,286			191,178			300,896

The information above is the amount before inter-company eliminations.

b) Public services concessions

The Group has public service concessions. When applicable, the income attributable to the construction or restoration of infrastructure has been accounted for by applying the models described in Note 2.5 (financial asset model, intangible asset and forked model).

After the termination of the Contract between TGNCA and the Ministry of Energy and Mines, Management is preparing new gas compression and liquefaction projects. Additionally, it is evaluating the centralization of the gas business through this vehicle, a decision that must be approved by the Board of Directors in 2020.

In all the Group’s concessions, the infrastructure returns to the Grantor at the end of the Contract.

The concessions held by the Group are as follows as of December 31, 2018 and 2019:

Name of Concession	Description	Estimated investment	Consideration	Ordinary shares held	Concession termination	Accounting model
Survial S.A.	This company operates and maintains a 750 km road from the San Juan de Marcona port to Urcos, Peru, which is connected to an interoceanic road. The road has five toll stations and three weigh stations.	US$99 million	Transaction secured by the Peruvian Government involving from annual payments for the maintenance and operation of the road, which is in charge of the Peruvian Ministry of Transport and Communications (MTC).	99.90%	2032	Financial asset
Canchaque S.A.C.	This company operates and periodically maintains a 78 km road which connects the towns of Buenos Aires and Canchaque, in Peru. The road has one toll station.	US$31 million (US$29 million in 2018)	Transaction secured by the Peruvian Government regardless the traffic volume. Revenue is secured by an annual minimum amount of US$0.3 million.	99.96%	2025	Financial asset
Concesionaria. La Chira S.A.	Designing, financing, constructing, operating and maintaining project called “Planta de Tratamiento de Aguas Residuales y Emisario Submarino La Chira”. The Project will treat approximately 25% of wastewaters in Lima.	S/250 million	Transaction secured by the Peruvian Government consisting of monthly and quarterly payments settled by Sedapal´s collection trust.	50.00%	2036	Financial asset
GyM Ferrovias S.A.	Concession for the operation of Line 1 of Lima Metro, Peru’s only urban railway system in Lima city, which includes (i) operation and maintenance of the existing trains (24 initial investment trains and 20 additional trains), (ii) operation and maintenance of the railway system (railway and infrastructure).	S/642 million	Transaction secured by the Peruvian Government involving a quarterly payment received from MTC based on km travelled per train.	75.00%	2041	Financial asset
Norvial S.A.	The Company operates and maintains the highway that connects Lima to the northwest of Peru. This 183 km road known as Red Vial 5 runs from the cities of Ancon to Pativilca and has three toll stations.	US$187 million (US$152 million in 2018)	From users (self-financed concession; revenue is derived from collection of tolls).	67.00%	2028	Intangible
Via Expresa Sur S.A.	The Company obtained the concession for designing, financing, building, operating and maintaining the infrastructure associated with the Via Expresa Sur Project. This project involves the second stage expansion of the Via Expresa - Paseo de la Republica,between Republica de Panama Avenue and and Panamericana highway.	US$197 million	The contract gives the right of collection from users; however the Peruvian Government shall pay the difference when the operating revenue obtained is below US$18 million during the first two years and US$19.7 million from the third year to the fifteenth year of the effective period of the financing, with a ceiling of US$10 million. In June 2017, the contract was suspended temporarily for one year by agreement between the Concessionaire and the grantor. The suspension was extended until June 2020.	99.98%	2053	Bifurcated

c) Main joint operations

At December 31, 2019, the Group is a partner to 51 Joint Operations with third parties (51 at December 31, 2018 and 64 at December 31, 2017). The table below lists the Group’s major Joint Operations.

	Percentage of interest
Joint operations	2017			2018			2019
Graña y Montero S.A.A.
- Concesionaria La Chira S.A.		50	%		50	%		50	%
GyM S.A.
- Consorcio CDEM		85	%		85	%		85	%
- Consorcio Huacho Pativilca		67	%		67	%		67	%
- Consorcio GyM – CONCIVILES		67	%		67	%		67	%
- Consorcio AMDP norte		50	%		50	%		—
- Consorcio Chicama - Ascope		50	%		50	%		50	%
- Consorcio Constructor Alto Cayma		50	%		50	%		50	%
- Consorcio Energía y Vapor		50	%		50	%		50	%
- Consorcio Ermitaño		50	%		50	%		50	%
- Consorcio GyM Sade Skanska		50	%		50	%		50	%
- Consorcio GYM-OSSA		—			—			50	%
- Consorcio GyM-Stracon		—			50	%		50	%
- Consorcio HV GyM		50	%		50	%		50	%
- Consorcio La Chira		50	%		50	%		50	%
- Consorcio Lima Actividades Comerciales Sur		50	%		50	%		50	%
- Consorcio Lima Actividades Sur		50	%		50	%		50	%
- Consorcio Menegua		50	%		50	%		50	%
- Consorcio para la Atención y Mantenimiento de Ductos		40	%		40	%		—
- Consorcio Rio Mantaro		50	%		50	%		50	%
- Consorcio Río Urubamba		50	%		50	%		50	%
- Consorcio TNT Vial y Vives - DSD Chile LTDA		50	%		50	%		50	%
- Constructora Incolur DSD Limitada		50	%		50	%		50	%
- Consorcio Alto Cayma		49	%		49	%		49	%
- Consorcio La Gloria		49	%		49	%		49	%
- Consorcio Norte Pachacutec		49	%		49	%		49	%
- Consorcio Italo Peruano		48	%		48	%		48	%
- Consorcio Vial Quinua		46	%		46	%		46	%
- Consorcio Constructor Ductos del Sur		29	%		29	%		29	%
- Consorcio Constructor Chavimochic		27	%		27	%		27	%
- Consorcio Vial ICAPAL		10	%		10	%		10	%
GMP S.A.
- Consorcio Terminales		50	%		50	%		50	%
- Terminales del Perú		50	%		50	%		50	%
CONCAR S.A.
- Consorcio Ancón-Pativilca		67	%		67	%		67	%
- Consorcio Peruano de Conservación		50	%		50	%		50	%
- Consorcio Manperán		67	%		67	%		67	%
- Consorcio Vial Sierra		50	%		100	%		50	%
- Consorcio Vial Ayahuaylas		99	%		99	%		99	%
- Consorcio Vial Sullana		99	%		99	%		99	%
- Consorcio Vial del Sur		99	%		99	%		99	%
Viva GyM S.A.
- Consorcio Panorama		35	%		—			—
GMI S.A.
- Consorcio Vial la Concordia		88	%		88	%		88	%
- Consorcio GMI- Haskoningdhv		—			70	%		70	%
- Consorcio Supervisor Ilo		55	%		55	%		55	%
- Consorcio Poyry-GMI		40	%		40	%		40	%
- Consorcio Internacional Supervisión Valle Sagrado		33	%		33	%		33	%
- Consorcio Ecotec - GMI - PIM		—			30	%		30	%
- Consorcio Ribereño Chinchaycamac		—			—			40	%

All the joint agreements listed above are operated in Peru, Chile and Colombia.

On November 2, 2019, the operation contract of Consorcio Terminales of the subsidiary GMP S.A., corresponding to the terminals of Pisco, Mollendo, Ilo, Cusco and Juliaca, was terminated, and the assets and operations were delivered to Petroperú. Currently, it is in the process of liquidating assets and liabilities.

The main activities of the joint operations correspond to:

Joint Operations in	Economic activity
Graña y Montero S.A.A.	Construction, operation and maintenance of La Chira wastewater treatment plant in the south of Lima. The project is aimed to solve Lima’s environmental problems caused by sewage discharged directly into the sea.
GyM S.A.	These joint operations were created exclusively for the development of construction contracts.
GMP S.A.	Consorcio Terminales and Terminales del Peru provide services for receiving, storing, shipping and transporting liquid hydrocarbons, such as gasoline, jet fuel, diesel fuel and residual among others.
CONCAR S.A.	Concar’s joint operations provides rehabilitation service, routine and periodic maintenance of the road, and road conservation and preservation services.
GMI S.A.	Engineering consulting services in, study and project execution, project management and Works supervision.

The consolidated financial statements do not include any other type of entities in addition to those mentioned above, such as trust funds or special purpose entities.

XML

Investments In Associates And Joint Ventures - Summary of Detailed Information about Joint Ventures (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure of associates and joint ventures [line items]
Carrying amount, joint ventures	S/ 8,160	S/ 7,483	S/ 18,618	S/ 103,356
Common Share [member] | Logistica Quimicos del Sur S.A.C. [member]
Disclosure of associates and joint ventures [line items]
Interest in capital, joint ventures	50.00%	50.00%
Carrying amount, joint ventures	S/ 8,006	S/ 7,230
Common Share [member] | Constructora SK-VyV Ltda. [member]
Disclosure of associates and joint ventures [line items]
Interest in capital, joint ventures	50.00%	50.00%
Carrying amount, joint ventures	S/ 29	S/ 34
Common Share [member] | Other joint ventures [member]
Disclosure of associates and joint ventures [line items]
Carrying amount, joint ventures	S/ 125	S/ 219

XML

Standards, Amendments and Interpretation Adopted in 2019 - Details about IFRS 16 effect in Group financial statement (Details) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Disclosure of quantitative information about right-of-use assets [line items]
Right-of-use	S/ 78,813
Impact of implementation 2019	97,706
Adjustments on contract fees	4,039
Total right-of-use assets	101,745
Cumulative depreciation	(22,958)
Foreign currency translation effect	26
Impact on assets	78,813
Buildings [member]
Disclosure of quantitative information about right-of-use assets [line items]
Right-of-use	59,599
Vehicles [member]
Disclosure of quantitative information about right-of-use assets [line items]
Right-of-use	20,211
Machinery [member]
Disclosure of quantitative information about right-of-use assets [line items]
Right-of-use	S/ 17,896

XML

Other Comprehensive Income (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Accumulated Other Comprehensive Income Loss

The analysis of this account is reflected below:

	Cash flow hedge			Foreign currency translations adjustment			Increase in fair value of available-for sale assets		Exchange difference from net investment in a foreign operation			Total
At January 1, 2017		(87	)		(54,556	)		7,461		(8,455	)		(55,637	)
Credit (charge) for the year		650			(9,166	)		—		9,222			706
Tax effects		(192	)		—			—		(2,729	)		(2,921	)
Other comprehensive income of the year		458			(9,166	)		—		6,493			(2,215	)
At December 31, 2017		371			(63,722	)		7,461		(1,962	)		(57,852	)
(Charge) credit for the year		160			(7,875	)		—		(10,800	)		(18,515	)
Tax effects		(47	)		—			—		2,808			2,761
Transfer to profit or loss (*)		—			14,805			—		—			14,805
Other comprehensive income of the year		113			6,930			—		(7,992	)		(949	)
At December 31, 2018		484			(56,792	)		7,461		(9,954	)		(58,801	)
(Charge) credit for the year		8			(6,892	)		—		—			(6,884	)
Tax effects		(2	)		—			—		—			(2	)
Other comprehensive income of the year		6			(6,892	)		—		—			(6,886	)
At December 31, 2019		490			(63,684	)		7,461		(9,954	)		(65,687	)

(*) The amount of S/14.8 million corresponds to the recognition of the translation adjustment from CAM Chile S.A., an indirect subsidiary sold in December 2018.

Summary of Other Comprehensive Income

The amounts in the above table only represent amounts attributable to the Company’s controlling interest, net of tax. The table below shows the movement in other comprehensive income per year:

	2017			2018			2019
Controlling interest		(2,215	)		(949	)		(6,886	)
Non-controlling interest		(3,117	)		(1,346	)		(1,734	)
Adjustment for actuarial gains and losses, net of tax		(2,948	)		16,589			—
Total value in OCI		(8,280	)		14,294			(8,620	)

XML

General Information - Additional Information (Detail) - 12 months ended Dec. 31, 2019 S/ in Millions, $ in Millions	PEN (S/)	USD ($)	USD ($)
General Information [abstract]
Payments to secure trust contingent obligations	S/ 80.0	$ 24.0
Maximum eventual liability	280.0		$ 85.0
Present value of trust liability	153.9		46.6
Maximum Exposure to Civil Reparation	S/ 52.7		$ 16.0

XML

Investments in Associates and Joint Ventures - Schedule of Movement of Investments in Associates (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of financial information of associates [abstract]
Opening balance	S/ 250,282	S/ 250,053	S/ 286,403
Contributions received		5,616	2,116
Dividends received			(259)
Equity interest in results	(220,993)	(5,308)	(5,566)
Decrease in capital		(30)	(111)
Disposal of Investment			(32,223)
Impairment of Investment	(374)
Conversion adjustment	(40)	(49)	42
Discontinued operations			(349)
Final balance	S/ 28,875	S/ 250,282	S/ 250,053

XML

Financial Risk Management - Additional Information (Detail) - PEN (S/)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure Of Financial Risk Management [line items]
Percentage of debt at fixed rate	61.80%	46.90%
Percentage of debt at variable rate	38.20%	53.10%
Increase / decrease in libor plus spread rate	5.00%
Increase / decrease in pretax profit	S/ 10,000	S/ 750,000
Bottom of range [member]
Disclosure Of Financial Risk Management [line items]
Gearing ratio	0.10%
Top of range [member]
Disclosure Of Financial Risk Management [line items]
Gearing ratio	0.70%
Foreign exchange risk [member]
Disclosure Of Financial Risk Management [line items]
Percentage change in foreign currency	2.00%
Increase / decrease in pretax profit	S/ 700,000	500,000	S/ 100,000
Foreign currency translation adjustments	S/ 8,200,000	S/ 5,700,000	S/ 11,300,000
Valor Adquisitivo Constante [member]
Disclosure Of Financial Risk Management [line items]
Percentage of debt at fixed rate plus inflation rate	37.70%	27.70%
Percentage of debt at variable rate plus inflation rate	0.50%	25.40%

XML

Intangible Assets - Summary of Concessions (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure Of Detailed Information About Concessions [Line Items]
EPC Contract	S/ 853,315	S/ 847,095	S/ 940,070	S/ 960,286
Cost of capitalized indebtedness at effective interest rates between 7.14% and 8.72%	3,700	7,900
Road improvement	14,449	15,558
Implementation for road safety	8,152	6,283
Work capitalization of second roadway	314,614	310,417
Disbursements for land adquisition	4,233	4,757
Other intangible assets contracted for the delivery process	7,477	6,775
Total Norvial S.A.	417,003	436,222
Other concessions	26,947	45,818
Contractual arrangements [member]
Disclosure Of Detailed Information About Concessions [Line Items]
EPC Contract	443,950	482,040
Service concession rights [member]
Disclosure Of Detailed Information About Concessions [Line Items]
EPC Contract	443,950	482,040	S/ 528,227	S/ 517,760
Cost of capitalized indebtedness at effective interest rates between 7.14% and 8.72%	950	9,836
Service concession rights [member] | Contractual arrangements [member]
Disclosure Of Detailed Information About Concessions [Line Items]
EPC Contract	62,319	70,133
Ancon Huacho Pativilca [Member] | Service concession rights [member]
Disclosure Of Detailed Information About Concessions [Line Items]
Cost of capitalized indebtedness at effective interest rates between 7.14% and 8.72%	S/ 4,809	S/ 12,463

XML

Deferred Income Tax -Summary Of Tax Loss Carry forward (Detail) S/ in Thousands	12 Months Ended
	Dec. 31, 2019 PEN (S/)
Disclosure Of Tax Loss Carryforwards [line items]
Application	S/ 517,316
GyM S.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	S/ 328,946
Tax Loss Aplication Method	B
Vial y Vives-DSD S.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	S/ 115,027
Tax Loss Aplication Method	N/A
Viva GyM S.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	S/ 21,530
Tax Loss Aplication Method	A
Statute of Limitations	2022
Grana y Montero S.A.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	S/ 17,875
Tax Loss Aplication Method	A
Statute of Limitations	2022
TGNCA S.A.C. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	S/ 15,989
Tax Loss Aplication Method	B
Morelco S.A.S. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	S/ 5,650
Tax Loss Aplication Method	N/A
GMP S.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	S/ 4,869
Tax Loss Aplication Method	A
Statute of Limitations	2021
GyM Chile S.p.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	S/ 4,052
Tax Loss Aplication Method	N/A
Survial S.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	S/ 2,053
Tax Loss Aplication Method	A
Statute of Limitations	2023
Incolur DSD [Member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	S/ 1,278
Tax Loss Aplication Method	N/A
Other investment subsidiaries [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	S/ 47
Two thousand twenty [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	123,915
Two thousand twenty [member] | GyM S.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	23,985
Two thousand twenty [member] | Vial y Vives-DSD S.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	71,010
Two thousand twenty [member] | Viva GyM S.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	16,917
Two thousand twenty [member] | Morelco S.A.S. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	5,650
Two thousand twenty [member] | GMP S.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	4,869
Two thousand twenty [member] | Survial S.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	1,437
Two thousand twenty [member] | Other investment subsidiaries [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	47
Two thousand twenty one [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	24,517
Two thousand twenty one [member] | GyM S.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	13,270
Two thousand twenty one [member] | Vial y Vives-DSD S.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	6,018
Two thousand twenty one [member] | Viva GyM S.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	4,613
Two thousand twenty one [member] | Survial S.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	616
Two thousand twenty two and later [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	368,884
Two thousand twenty two and later [member] | GyM S.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	291,691
Two thousand twenty two and later [member] | Vial y Vives-DSD S.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	37,999
Two thousand twenty two and later [member] | Grana y Montero S.A.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	17,875
Two thousand twenty two and later [member] | TGNCA S.A.C. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	15,989
Two thousand twenty two and later [member] | GyM Chile S.p.A. [member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	4,052
Two thousand twenty two and later [member] | Incolur DSD [Member]
Disclosure Of Tax Loss Carryforwards [line items]
Application	S/ 1,278

XML

Work in Progress, Net (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Work in Progress

At December 31 this account comprises:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Unbilled receivable concessions in progress		32,212		23,117		—		—		32,212		23,117
Work in progress		28,538		49,457		28,538		49,457		—		—
		60,750		72,574		28,538		49,457		32,212		23,117

Summary of Work in Progress Grouped by Main Projects

Below is the work in progress grouped by the main projects:

	2018		2019
Infrastructure
Road operation and maintenance		32,212		23,117
		32,212		23,117
Engineering and construction
Engineering and Construction Works - GYM Chile S.p.A.		13,007		19,531
Talara Refinery		—		20,126
North Concentrator Plant of Quellaveco		—		1,033
Others		15,531		8,767
		28,538		49,457
		60,750		72,574

XML

Costs And Expenses by Nature - Summary of Wages, Salaries and Fringe Benefits (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Classes of employee benefits expense [abstract]
Salaries	S/ 786,346	S/ 629,641	S/ 747,195
Statutory gratification	88,369	80,697	106,797
Social contributions	61,533	73,297	76,330
Employee's severance indemnities	49,944	50,852	43,399
Vacations	39,298	39,221	33,603
Worker's profit sharing	6,340	7,862	9,777
Others	37,051	41,327	37,003
Total	S/ 1,068,881	S/ 922,897	S/ 1,054,104

XML

Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Disclosure of Profit before Income Tax Reconciles to EBITDA

Profit before income tax reconciles to EBITDA as follows:

EBITDA

	2017		2018		2019
Net profit (loss)		209,238		57,415		(838,642	)
Financial income and expenses		137,035		197,057		157,053
Income tax		46,305		113,318		319,957
Depreciation and amortization		179,725		189,509		202,630
EBITDA (*)		572,303		557,299		(159,002	)

(*)  Discontinued operations not included    

Disclosure of Detailed Information About EBITDA for Each Segment

EBITDA for each segment is as follows:

	2017			2018			2019
Engineering and construction		119,987			19,243			2,885
Infrastructure		300,935			411,502			355,296
Real estate		177,286			240,991			76,239
Parent company operations		125,938			(27,803	)		(1,077,259	)
Intercompany eliminations		(151,843	)		(86,634	)		483,837
EBITDA		572,303			557,299			(159,002	)

Summary of Breakdown by Operating Segments

Backlog refers to the expected future revenue undersigned contracts and legally binding letters of intent. The breakdown by operating segments as of December 31, 2019, and the dates in which they are estimated to be realized is shown in the following table:

	As of December 31, 2019
Engineering and Construction		3,018,822
Infrastructure		1,837,305
Real estate		209,893
Intercompany eliminations		(434,039	)
		4,631,981

Disclosure of Detailed Information About Operating Segments Financial Position and Profit (Loss)

The following table shows the Group’s financial statements by operating segments:

Operating segments financial position

Segment reporting

			Infrastructure
	Engineering and construction		Energy		Toll roads		Transportation		Water treatment		Real estate		Parent Company operations		Eliminations			Consolidated
As of December 31, 2018
Assets.-
Cash and cash equivalent		177,455		34,816		168,460		191,178		6,700		93,262		129,269		—			801,140
Trade accounts receivables, net		583,842		54,350		78,013		226,919		598		63,038		1,068		—			1,007,828
Work in progress, net		24,962		—		—		—		—		—		3,576		—			28,538
Accounts receivable from related parties		203,583		492		40,820		758		9,930		60,759		98,308		(379,747	)		34,903
Other accounts receivable		386,467		37,611		28,492		31,012		199		55,508		49,160		2			588,451
Inventories, net		27,852		18,823		9,206		25,282		—		448,328		—		(15,444	)		514,047
Prepaid expenses		3,825		1,345		3,068		874		135		81		1,221		—			10,549
		1,407,986		147,437		328,059		476,023		17,562		720,976		282,602		(395,189	)		2,985,456
Non-current assets classified as held for sale		—		—		—		—		—		—		247,798		—			247,798
Total current assets		1,407,986		147,437		328,059		476,023		17,562		720,976		530,400		(395,189	)		3,233,254
Long-term trade accounts receivable, net		14,455		—		33,380		966,202		—		6,030		—		—			1,020,067
Long-term work in progress, net		—		—		32,212		—		—		—		—		—			32,212
Long-term accounts receivable from related parties		254,660		—		39,341		—		—		—		744,655		(260,430	)		778,226
Prepaid expenses		—		—		28,214		5,152		840		—		—		(509	)		33,697
Other long-term accounts receivable		77,028		63,797		7,058		64,817		7,346		30,268		52,645		(2	)		302,957
Investments in associates and joint ventures		114,676		7,230		—		—		—		5,604		2,213,023		(2,082,768	)		257,765
Investment property		—		—		—		—		—		29,133		—		—			29,133
Property, plant and equipment, net		205,678		171,430		14,585		1,586		109		9,237		69,088		(1,159	)		470,554
Intangible assets, net		160,088		183,614		466,153		749		—		1,105		23,514		11,872			847,095
Deferred income tax asset		166,624		5,025		11,876		—		620		17,127		218,201		5,963			425,436
Total non-current assets		993,209		431,096		632,819		1,038,506		8,915		98,504		3,321,126		(2,327,033	)		4,197,142
Total assets		2,401,195		578,533		960,878		1,514,529		26,477		819,480		3,851,526		(2,722,222	)		7,430,396
Liabilities.-
Borrowings		232,409		26,621		15,384		209,463		—		133,105		209,492		—			826,474
Bonds		—		—		25,745		13,422		—		—		—		—			39,167
Trade accounts payable		777,130		49,254		61,233		104,652		121		31,173		55,968		—			1,079,531
Accounts payable to related parties		179,351		1,933		46,099		65,256		58		35,085		91,754		(363,595	)		55,941
Current income tax		5,898		2,797		1,398		9,888		226		4,219		1,381		—			25,807
Other accounts payable		389,896		13,147		72,823		11,677		631		106,286		38,209		—			632,669
Provisions		521		5,412		—		—		—		264		—		—			6,197
Non-current liabilities classified as held for sale		—		—		—		—		—		—		225,828		—			225,828
Total current liabilities		1,585,205		99,164		222,682		414,358		1,036		310,132		622,632		(363,595	)		2,891,614
Borrowings		9,314		87,166		556		—		—		10,684		268,478		—			376,198
Long-term bonds		—		—		299,637		598,238		—		—		—		—			897,875
Other long-term accounts payable		357,146		—		31,477		154,756		1,656		26,470		2,605		—			574,110
Long-term accounts payable to related parties		8,880		—		1,167		81,207		23,445		—		183,826		(276,676	)		21,849
Provisions		32,122		20,234		—		—		—		—		51,055		—			103,411
Derivative financial instruments		—		61		—		—		—		—		—		—			61
Deferred income tax liability		5,564		24,541		7,010		37,178		—		—		1,054		—			75,347
Total non-current liabilities		413,026		132,002		339,847		871,379		25,101		37,154		507,018		(276,676	)		2,048,851
Total liabilities		1,998,231		231,166		562,529		1,285,737		26,137		347,286		1,129,650		(640,271	)		4,940,465
Equity attributable to controlling interest in the Company		331,178		323,943		332,406		171,594		340		193,483		2,708,803		(1,973,387	)		2,088,360
Non-controlling interest		71,786		23,424		65,943		57,198		—		278,711		13,073		(108,564	)		401,571
Total liabilities and equity		2,401,195		578,533		960,878		1,514,529		26,477		819,480		3,851,526		(2,722,222	)		7,430,396
As of December 31, 2019
Assets.-
Cash and cash equivalent		372,991		53,118		123,020		300,896		6,388		60,718		31,847		—			948,978
Trade accounts receivables, net		531,591		63,402		44,513		97,059		1,168		83,019		985		—			821,737
Work in progress, net		49,457		—		—		—		—		—		—		—			49,457
Accounts receivable from related parties		202,181		369		43,852		1,853		—		1,144		99,794		(312,535	)		36,658
Other accounts receivable		327,977		30,853		30,228		18,548		109		9,509		27,274		2			444,500
Inventories, net		57,093		32,366		7,109		30,594		—		437,012		—		(11,601	)		552,573
Prepaid expenses		6,812		1,271		2,779		231		133		—		122		—			11,348
		1,548,102		181,379		251,501		449,181		7,798		591,402		160,022		(324,134	)		2,865,251
Non-current assets classified as held for sale		2,398		—		—		—		—		—		203,020		—			205,418
Total current assets		1,550,500		181,379		251,501		449,181		7,798		591,402		363,042		(324,134	)		3,070,669
Long-term trade accounts receivable, net		97,256		—		36,273		619,086		—		587		—		—			753,202
Long-term work in progress, net		—		—		23,117		—		—		—		—		—			23,117
Long-term accounts receivable from related parties		290,966		—		836		—		10,475		—		552,687		(308,023	)		546,941
Prepaid expenses		—		887		24,462		2,307		788		—		—		(510	)		27,934
Other long-term accounts receivable		113,879		63,649		5,156		—		7,346		50,449		59,844		—			300,323
Investments in associates and joint ventures		109,839		8,006		—		—		—		6,062		1,495,422		(1,582,294	)		37,035
Investment property		1,450		—		—		—		—		26,876		—		—			28,326
Property, plant and equipment, net		186,589		184,819		11,106		841		153		11,742		49,779		(1,159	)		443,870
Intangible assets, net		136,547		244,901		443,420		794		—		1,029		19,490		7,134			853,315
Right-of-use assets, net		5,638		24,038		3,860		5		7		5,048		55,532		(15,315	)		78,813
Deferred income tax asset		176,740		4,741		13,054		—		720		19,736		20,752		5,176			240,919
Total non-current assets		1,118,904		531,041		561,284		623,033		19,489		121,529		2,253,506		(1,894,991	)		3,333,795
Total assets		2,669,404		712,420		812,785		1,072,214		27,287		712,931		2,616,548		(2,219,125	)		6,404,464
Liabilities.-
Borrowings		180,535		42,760		2,383		5		6		116,231		121,379		(9,039	)		454,260
Bonds		—		—		28,995		15,742		—		—		—		—			44,737
Trade accounts payable		932,142		67,444		34,762		28,508		132		39,645		33,488		—			1,136,121
Accounts payable to related parties		206,907		2,233		35,554		21,024		—		23,437		58,951		(309,190	)		38,916
Current income tax		18,451		961		3,710		23,887		—		704		286		—			47,999
Other accounts payable		441,271		16,721		53,987		4,713		835		83,345		34,433		—			635,305
Provisions		6,031		18,459		6,183		—		—		230		82,580		—			113,483
Non-current liabilities classified as held for sale		—		—		—		—		—		—		210,025		—			210,025
Total current liabilities		1,785,337		148,578		165,574		93,879		973		263,592		541,142		(318,229	)		2,680,846
Borrowings		32,620		116,218		2,070		—		—		11,010		190,671		(7,783	)		344,806
Long-term bonds		—		—		276,550		602,755		—		—		—		—			879,305
Other long-term accounts payable		222,887		—		15,989		2,176		2,106		26,841		3,102		—			273,101
Long-term accounts payable to related parties		120,255		—		836		22,583		23,784		—		165,286		(310,161	)		22,583
Provisions		80,125		40,268		24,691		1,394		—		—		68,474		—			214,952
Derivative financial instruments		—		52		—		—		—		—		—		—			52
Deferred income tax liability		31,037		36,476		5,806		39,172		—		—		243		—			112,734
Total non-current liabilities		486,924		193,014		325,942		668,080		25,890		37,851		427,776		(317,944	)		1,847,533
Total liabilities		2,272,261		341,592		491,516		761,959		26,863		301,443		968,918		(636,173	)		4,528,379
Equity attributable to controlling interest in the Company		330,992		346,415		258,223		232,692		424		137,542		1,644,707		(1,473,185	)		1,477,810
Non-controlling interest		66,151		24,413		63,046		77,563		—		273,946		2,923		(109,767	)		398,275
Total liabilities and equity		2,669,404		712,420		812,785		1,072,214		27,287		712,931		2,616,548		(2,219,125	)		6,404,464

Operating segment performance

Segment Reporting

				Infrastructure
	Engineering																		Parent
	and												Water			Real			Company
	construction			Energy			Toll roads			Transportation			treatment			estate			operations			Eliminations			Consolidated
For the year ended December 31, 2017 -
Revenue		2,331,907			436,876			642,127			365,771			3,152			647,535			70,050			(483,405	)		4,014,013
Gross profit (loss)		176,473			71,825			139,196			48,696			445			147,383			(37,771	)		(43,795	)		502,452
Administrative expenses		(188,162	)		(15,854	)		(32,453	)		(15,279	)		(317	)		(21,189	)		(100,968	)		51,768			(322,454	)
Other income and expenses, net		(46,445	)		5,138			1,061			5			—			(3,700	)		10,512			560			(32,869	)
Gain from the sale of investments		—			—			—			—			—			49,002			(18,672	)		4,215			34,545
Operating (loss) profit		(58,134	)		61,109			107,804			33,422			128			171,496			(146,899	)		12,748			181,674
Financial expenses		(46,655	)		(13,423	)		(6,892	)		(8,000	)		(50	)		(21,918	)		(81,310	)		27,471			(150,777	)
Financial income		8,491			1,965			3,257			3,606			26			3,569			35,431			(42,603	)		13,742
Share of profit or loss in associates and joint ventures		30,982			1,584			—			—			—			456			142,595			(175,144	)		473
(Loss) profit before income tax		(65,316	)		51,235			104,169			29,028			104			153,603			(50,183	)		(177,528	)		45,112
Income tax		877			(13,151	)		(32,290	)		(9,544	)		(228	)		(35,900	)		44,032			(101	)		(46,305	)
(Loss) profit from continuing operations		(64,439	)		38,084			71,879			19,484			(124	)		117,703			(6,151	)		(177,629	)		(1,193	)
Profit (Loss) from discontinuing operations		76,837			—			—			—			—			—			123,603			9,991			210,431
(Loss) profit for the year		12,398			38,084			71,879			19,484			(124	)		117,703			117,452			(167,638	)		209,238
(Loss) profit from attributable to:
Owners of the Company		12,078			33,714			55,620			14,613			(124	)		48,647			125,182			(140,992	)		148,738
Non-controlling interest		320			4,370			16,259			4,871			—			69,056			(7,730	)		(26,646	)		60,500
		12,398			38,084			71,879			19,484			(124	)		117,703			117,452			(167,638	)		209,238
For the year ended December 31, 2018 -
Revenue		1,960,863			560,506			733,148			586,329			3,270			630,130			62,098			(636,882	)		3,899,462
Gross profit (loss)		62,095			120,360			107,092			122,567			592			287,959			(10,564	)		(15,612	)		674,489
Administrative expenses		(136,066	)		(20,898	)		(35,626	)		(12,007	)		(296	)		(50,730	)		(62,890	)		40,080			(278,433	)
Other income and expenses, net		(13,515	)		1,243			(11	)		31			—			(1,971	)		(47,779	)		660			(61,342	)
Operating (loss) profit		(87,486	)		100,705			71,455			110,591			296			235,258			(121,233	)		25,128			334,714
Financial expenses		(82,861	)		(15,631	)		(26,691	)		(20,604	)		6			(11,859	)		(115,077	)		24,735			(247,982	)
Financial income		15,122			4,593			2,560			35,147			554			3,556			31,752			(42,359	)		50,925
Share of profit or loss in associates and joint ventures		11,366			1,608			—			—			—			(10	)		84,138			(100,811	)		(3,709	)
(Loss) profit before income tax		(143,859	)		91,275			47,324			125,134			856			226,945			(112,076	)		(101,651	)		133,948
Income tax		14,361			(26,275	)		(15,737	)		(38,017	)		(517	)		(69,166	)		22,867			(834	)		(113,318	)
(Loss) profit from continuing operations		(129,498	)		65,000			31,587			87,117			339			157,779			(89,209	)		(102,485	)		20,630
Profit (Loss) from discontinuing operations		44,096			—			—			—			—			—			(3,709	)		(3,602	)		36,785
(Loss) profit for the year		(85,402	)		65,000			31,587			87,117			339			157,779			(92,918	)		(106,087	)		57,415
(Loss) profit from attributable to:
Owners of the Company		(86,857	)		59,866			26,731			65,338			339			28,921			(85,715	)		(91,811	)		(83,188	)
Non-controlling interest		1,455			5,134			4,856			21,779			—			128,858			(7,203	)		(14,276	)		140,603
		(85,402	)		65,000			31,587			87,117			339			157,779			(92,918	)		(106,087	)		57,415
For the year ended December 31, 2019 -
Revenue		2,797,326			552,584			633,301			397,853			3,555			264,401			87,476			(651,492	)		4,085,004
Gross profit (loss)		98,362			108,291			96,164			119,464			500			70,787			(2,168	)		(49,637	)		441,763
Administrative expenses		(141,421	)		(24,230	)		(28,623	)		(17,991	)		(397	)		(22,045	)		(40,402	)		61,201			(213,908	)
Other income and expenses, net		9,937			606			(47,998	)		(2,661	)		12			20,020			(305,749	)		(921	)		(326,754	)
Gain from sale of investments		—			—			—			—			—			—			—			—			—
Operating (loss) profit		(33,122	)		84,667			19,543			98,812			115			68,762			(348,319	)		10,643			(98,899	)
Financial expenses		(74,171	)		(13,266	)		(27,297	)		(10,948	)		(12	)		(42,320	)		(101,914	)		38,219			(231,709	)
Financial income		5,643			2,033			2,245			33,215			826			3,829			73,832			(46,967	)		74,656
Dividends		—			—			—			—			—			—			12,688			(12,688	)		—
Share of profit or loss in associates and joint ventures		(3,558	)		2,293			—			—			—			458			(711,962	)		493,995			(218,774	)
(Loss) profit before income tax		(105,208	)		75,727			(5,509	)		121,079			929			30,729			(1,075,675	)		483,202			(474,726	)
Income tax		(35,457	)		(22,911	)		(17,112	)		(39,634	)		(506	)		(7,000	)		(196,219	)		(1,118	)		(319,957	)
(Loss) profit from continuing operations		(140,665	)		52,816			(22,621	)		81,445			423			23,729			(1,271,894	)		482,084			(794,683	)
Loss from discontinuing operations		—			—			—			—			—			—			(42,857	)		(1,102	)		(43,959	)
(Loss) profit for the year		(140,665	)		52,816			(22,621	)		81,445			423			23,729			(1,314,751	)		480,982			(838,642	)
(Loss) profit from attributable to:
Owners of the Company		(137,110	)		48,056			(28,270	)		61,084			423			(4,995	)		(1,304,675	)		480,766			(884,721	)
Non-controlling interest		(3,555	)		4,760			5,649			20,361			—			28,724			(10,076	)		216			46,079
		(140,665	)		52,816			(22,621	)		81,445			423			23,729			(1,314,751	)		480,982			(838,642	)

Disclosure of Geographical Areas

Segments by geographical area

	2017		2018		2019
Revenues:
- Peru		3,589,048		3,347,540		3,454,959
- Chile		371,986		226,891		388,284
- Colombia		50,829		325,031		241,761
- Bolivia		2,150		—		—
		4,014,013		3,899,462		4,085,004
Non-current assets:
- Peru		4,164,342		3,896,920		3,063,146
- Chile		407,152		142,383		146,891
- Colombia		203,203		157,839		123,758
- Bolivia		149		—		—
- Guyana		878		—		—
		4,775,724		4,197,142		3,333,795

XML

Loss Per Share - Summary of Basic Earnings Per Share (Parenthetical) (Detail) - S/ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Earnings per share [abstract]
Weighted average number of shares issued per share	S/ 1.00	S/ 1.00	S/ 1.00

XML

Borrowings - Summary of Bank Loan (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Disclosure of detailed information about borrowings [line items]
Current borrowings	S/ 454,260	S/ 826,474
Non-current borrowings	S/ 344,806	376,198
GyM Ferrovias S.A. [member] | One month LIBOR [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate	2.00%
Concar S.A. [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate	15.75%
Bank loans [member]
Disclosure of detailed information about borrowings [line items]
Current borrowings	S/ 424,362	810,188
Non-current borrowings	S/ 129,296	213,293
Bank loans [member] | GyM S.A. [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, maturity	2022
Current borrowings	S/ 170,798	227,770
Non-current borrowings	S/ 26,401
Bank loans [member] | Grana Y Montero S.A.A. [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, maturity	2022
Current borrowings	S/ 112,854	206,836
Non-current borrowings		125,547
Bank loans [member] | GyM Ferrovias S.A. [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, maturity	2019
Current borrowings		209,463
Bank loans [member] | Viva GyM S.A. [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, maturity	2020
Current borrowings	S/ 110,343	129,617
Non-current borrowings		2,102
Bank loans [member] | Concar S.A. [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, maturity	2019
Current borrowings		13,915
Bank loans [member] | GMP S.A. [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, maturity	2026
Current borrowings	S/ 30,367	22,587
Non-current borrowings	S/ 102,895	S/ 85,644
Bottom of range [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate	7.00%	7.00%
Bottom of range [member] | GyM S.A. [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate	1.00%
Bottom of range [member] | Grana Y Montero S.A.A. [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate	9.10%
Bottom of range [member] | Viva GyM S.A. [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate	7.00%
Bottom of range [member] | GMP S.A. [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate	5.05%
Top of range [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate	12.00%	12.00%
Top of range [member] | GyM S.A. [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate	11.00%
Top of range [member] | Grana Y Montero S.A.A. [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate	10.10%
Top of range [member] | Viva GyM S.A. [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate	12.00%
Top of range [member] | GMP S.A. [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate	6.04%

XML

Investments in Associates and Joint Ventures (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Schedule of Amounts Recognised in Balance Sheet

At December 31, this account comprises:

	2018		2019
Associates		250,282		28,875
Joint ventures		7,483		8,160
		257,765		37,035

Schedule of Amounts Recognised in Income Statement

The amounts recognized in the income statement as the value of the equity interest are as follows:

	2018			2019
Associates		(5,308	)		(220,993	)
Joint ventures		1,599			2,219
		(3,709	)		(218,774	)

Summary of Detailed Information about Associates

Set out in the table below are the associates of the Group at December 31, 2018, and 2019 the associates listed below have share capital solely consisting of common shares, which are held directly by the Group. None of the associates are listed companies; therefore, there is no quoted market price available for their shares.

							Carrying amount
	Class		Interest in capital				At December 31,
Entity	of share		2018		2019		2018		2019
			%		%
Gasoducto Sur Peruano S.A. (*)		Common		21.49		21.49		218,276		—
Concesionaria Chavimochic S.A.C.		Common		26.50		26.50		20,524		18,320
Peru Piping Spools S.A.C.		Common		33.33		33.33		5,102		4,166
Obratres S.A.C.		Common		37.50		37.50		3,758		3,756
Inversiones Majes S.A.		Common		9.59		9.59		1,846		2,306
Others								776		327
								250,282		28,875

(*) Mainly corresponds to an write-off of the investment in Gasoducto Sur Peruano S.A. as a whole.

Schedule of Movement of Investments in Associates

The movement of the investments in associates is as follows:

	2017			2018			2019
Opening balance		286,403			250,053			250,282
Contributions received		2,116			5,616			—
Dividends received		(259	)		—			—
Equity interest in results		(5,566	)		(5,308	)		(220,993	)
Decrease in capital		(111	)		(30	)		—
Disposal of investments		(32,223	)		—			—
Impairment of investment		—			—			(374	)
Conversion adjustment		42			(49	)		(40	)
Discontinued Operations		(349	)
Final balance		250,053			250,282			28,875

Summary of Financial Information for Associates

Summarized financial information for associates 

Gaseoducto Sur Peruano S.A. do not have activity in 2018 and 2019.

	Gasoducto Sur Peruano S.A.			Concesionaria Chavimochic S.A.C.
	At December, 31			At December, 31
Entity	2018			2018			2019
	(Liquidation base)
Current
Assets		7,006,473			66,052			55,586
Liabilities		(5,294,214	)		(2,183	)		(1,521	)
Non-current
Assets		—			13,580			16,007
Liabilities		—			—			—
Net assets		1,712,259			77,449			70,072

	Concesionaria Chavimochic S.A.C.
Entity	2018			2019
Administrative expenses		(8,455	)		(11,916	)
Loss of the year before tax		(8,455	)		(11,916	)
Income tax		2,543			3,600
Loss of the year		(5,912	)		(8,316	)
Total comprehensive loss		(5,912	)		(8,316	)

Summary of Detailed Information about Joint Ventures

							Carrying amount
	Class		Interest in capital				At December 31,
Entity	of share		2018		2019		2018		2019
			%		%
Logistica Quimicos del Sur S.A.C.		Common		50.00		50.00		7,230		8,006
Constructora SK-VyV Ltda.		Common		50.00		50.00		34		29
Others				—		—		219		125
								7,483		8,160

Schedule of Movement of Investments in Joint Ventures

Logistica Quimicos del Sur S.A.C. operates the Matarani chemical terminal.

The movement of the investments in joint ventures was as follows:

	2017			2018			2019
Opening balance		103,356			18,618			7,483
Equity interest in results		6,039			1,599			2,219
Disposal of Investment		(88,556	)		(10,112	)		—
Dividends received		(3,758	)		(1,823	)		(1,517	)
Conversion adjustment		334			79			(14	)
Impairment of investment		—			(878	)		(11	)
Discontinued Operations		1,203			—			—
Final balance		18,618			7,483			8,160

Summary of Financial Information for Joint Ventures

The following table shows the financial information of the principal joint ventures:

Summarized financial information for joint ventures

	At December, 31
Logistica Quimicos del Sur S.A.C.	2018			2019
Current
Cash and cash equivalents		1,520			2,131
Other current assets		1,549			2,416
Total current assets		3,069			4,547
Other current liabilities		(3,513	)		(4,381	)
Total current liabilities		(3,513	)		(4,381	)
Non-current
Total non-current assets		37,349			37,620
Total non-current liabilities		(22,445	)		(21,773	)
Net assets		14,460			16,013
Revenue		11,399			12,622
Depreciation and amortization		(2,313	)		(2,505	)
Interest expense		(668	)		(644	)
Profit from continuing operations		4,698			6,500
Income tax expense		(1,482	)		(1,913	)
Profit from continuing operations after income tax		3,216			4,587
Other comprehensive income		—			—
Total comprehensive income		3,216			4,587

XML

Tax Situation - Summary of Weighted-Average Income Tax Rate Applicable To Pre-tax Income (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reconciliation of accounting profit multiplied by applicable tax rates [abstract]
Profit (loss) before income tax	S/ (474,726)	S/ 133,948	S/ 45,112
Income tax by applying local applicable tax rates on profit generated in the respective countries	(141,370)	40,507	13,811
Reversal of deferred income tax asset	174,716
Non-recoverable item	85,301
Non-deductible expenses	84,832	70,052	30,472
Unrecognized deferred income tax asset	82,424	8,592	1,562
Change in prior years estimations	36,529	3,235	9,005
Provision of tax contingencies	7,079
Adjustment for changes in rates of income tax	622	1,524	27
PPUA adjustment for changes in tax rates			(611)
Non-taxable income	(1,195)	(1,691)	(4)
Equity method (profit) loss	(64)	(1,094)	394
Others, net	(8,917)	(7,807)	(8,351)
Income tax	S/ 319,957	S/ 113,318	S/ 46,305

XML

Borrowings - Summary of Lease Liability for Right-of-use Asset (Detail) S/ in Thousands	12 Months Ended
	Dec. 31, 2019 PEN (S/)
Disclosure Of Lease liabilities [Line Items]
Current	S/ 18,246
Non-current	S/ 61,970
GMP S.A. [member]
Disclosure Of Lease liabilities [Line Items]
Date of maturity	2023
Current	S/ 10,584
Non-current	S/ 10,261
GMP S.A. [member] | Bottom of range [member]
Disclosure Of Lease liabilities [Line Items]
Interest rate	6.59%
GMP S.A. [member] | Top of range [member]
Disclosure Of Lease liabilities [Line Items]
Interest rate	7.80%
Grana y Montero S.A.A. [member]
Disclosure Of Lease liabilities [Line Items]
Interest rate	7.88%
Date of maturity	2027
Current	S/ 4,888
Non-current	S/ 50,362
GyM S.A. [member]
Disclosure Of Lease liabilities [Line Items]
Interest rate	7.65%
Date of maturity	2022
Current	S/ 1,592
Non-current	S/ 541
Concar S.A. [member]
Disclosure Of Lease liabilities [Line Items]
Interest rate	5.55%
Date of maturity	2024
Current	S/ 1,171
Non-current	S/ 806
Other minors [member]
Disclosure Of Lease liabilities [Line Items]
Date of maturity	2020
Current	S/ 11
Other minors [member] | Bottom of range [member]
Disclosure Of Lease liabilities [Line Items]
Interest rate	6.31%
Other minors [member] | Top of range [member]
Disclosure Of Lease liabilities [Line Items]
Interest rate	10.00%

XML

Other Comprehensive Income - Summary of Other Comprehensive Income Loss (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of analysis of other comprehensive income by item [line items]
Other comprehensive income	S/ (8,620)	S/ 14,294	S/ (8,280)
Equity attributable to owners of parent [member]
Disclosure of analysis of other comprehensive income by item [line items]
Other comprehensive income	(6,886)	(949)	(2,215)
Non-controlling interests [member]
Disclosure of analysis of other comprehensive income by item [line items]
Other comprehensive income	S/ (1,734)	(1,346)	(3,117)
Reserve of remeasurements of defined benefit plans [member]
Disclosure of analysis of other comprehensive income by item [line items]
Other comprehensive income		S/ 16,589	S/ (2,948)

XML

Other Income and Expenses, Net - Summary of Other Income and Expenses, Net (Parenthetical) (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of other income and expenses net [line items]
Percentage of gains	70.00%
Impairment of accounts receivable	S/ 4,900	S/ 65,076	S/ 19,109
Promotora Larcomar S.A. [member]
Disclosure of other income and expenses net [line items]
Impairment of accounts receivable	276,000
Provision for impairment on work in progress	18,000
Civil reparation [member]
Disclosure of other income and expenses net [line items]
Increase in provision	S/ 69,000

XML

Consolidated Statement of Comprehensive Income - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Statement of comprehensive income [abstract]
Profit (loss) for the year	S/ (838,642)	S/ 57,415	S/ 209,238
Items that will not be reclassified to profit or loss
Remeasurement of actuarial gains and losses, net of tax		16,589	(4,031)
Items that may be subsequently reclassified to profit or loss
Cash flow hedge, net of tax	6	119	482
Foreign currency translation adjustment, net of tax	(8,170)	5,733	(11,341)
Exchange difference from net investment in a foreign operation, net of tax	(456)	(8,147)	6,610
Items that may be subsequently reclassified to profit or loss	(8,620)	(2,295)	(4,249)
Other comprehensive income for the year, net of tax	(8,620)	14,294	(8,280)
Total comprehensive income for the year	(847,262)	71,709	200,958
Comprehensive income attributable to:
Owners of the Company	(891,607)	(67,548)	143,575
Non-controlling interest	44,345	139,257	57,383
Total comprehensive income for the year	(847,262)	71,709	200,958
Comprehensive income attributable to owners of the Company:
Continuing operations	(848,994)	(131,284)	(62,773)
Discontinued operations	(42,613)	63,736	206,348
Total comprehensive income for the year	S/ (891,607)	S/ (67,548)	S/ 143,575

XML

Interests in Other Entities - Summary of Group's Subsidiaries and Related Interests (Detail)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Engineering and Construction [member] | GyM S.A. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares directly held by Parent (%)	98.87%	98.24%
Percentage of common shares held by the Group (%)	98.87%	98.24%
Percentage of common shares held by non-controlling interests (%)	1.13%	1.76%
Engineering and Construction [member] | Morelco S.A.S. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares held by Subsidiaries (%)	70.00%	70.00%
Percentage of common shares held by the Group (%)	70.00%	70.00%
Percentage of common shares held by non-controlling interests (%)	30.00%	30.00%
Engineering and Construction [member] | GyM Chile S.p.A. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares held by Subsidiaries (%)	100.00%	94.49%
Percentage of common shares held by the Group (%)	100.00%	99.99%
Percentage of common shares held by non-controlling interests (%)		0.01%
Engineering and Construction [member] | Vial y Vives - DSD S.A. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares held by Subsidiaries (%)	94.49%	94.49%
Percentage of common shares held by the Group (%)	94.49%	94.49%
Percentage of common shares held by non-controlling interests (%)	5.51%	5.51%
Engineering and Construction [member] | GMI S.A. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares directly held by Parent (%)	89.41%	89.41%
Percentage of common shares held by the Group (%)	89.41%	89.41%
Percentage of common shares held by non-controlling interests (%)	10.59%	10.59%
Engineering and Construction [member] | Ecologia Tecnologia Ambiental S.A.C.[member]
Disclosure of subsidiaries [line items]
Percentage of common shares held by Subsidiaries (%)	100.00%
Percentage of common shares held by the Group (%)	100.00%	99.99%
Percentage of common shares held by non-controlling interests (%)		0.01%
Engineering and Construction [member] | Gm Ingenieria y Construccin de CV [member]
Disclosure of subsidiaries [line items]
Percentage of common shares held by Subsidiaries (%)	99.00%
Percentage of common shares held by the Group (%)	99.00%	99.00%
Percentage of common shares held by non-controlling interests (%)	1.00%	1.00%
Engineering and Construction [member] | Gm ingeniera Bolivia S.R.L. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares held by Subsidiaries (%)	98.57%
Percentage of common shares held by the Group (%)	98.57%	99.00%
Percentage of common shares held by non-controlling interests (%)	1.43%	1.00%
Infrastructure [member] | GMP S.A. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares directly held by Parent (%)	95.00%	95.00%
Percentage of common shares held by the Group (%)	95.00%	95.00%
Percentage of common shares held by non-controlling interests (%)	5.00%	5.00%
Infrastructure [member] | Oiltanking Andina Services S.A. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares held by Subsidiaries (%)	50.00%	50.00%
Percentage of common shares held by the Group (%)	50.00%	50.00%
Percentage of common shares held by non-controlling interests (%)	50.00%	50.00%
Infrastructure [member] | Transportadora de Gas Natural Comprimido Andino S.A.C. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares held by Subsidiaries (%)	99.93%	99.93%
Percentage of common shares held by the Group (%)	99.93%	99.93%
Percentage of common shares held by non-controlling interests (%)	0.07%	0.07%
Infrastructure [member] | Concar S.A. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares directly held by Parent (%)	100.00%	99.99%
Percentage of common shares held by the Group (%)	100.00%	99.99%
Percentage of common shares held by non-controlling interests (%)		0.01%
Infrastructure [member] | GyM Ferrovias S.A. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares directly held by Parent (%)	75.00%	75.00%
Percentage of common shares held by the Group (%)	75.00%	75.00%
Percentage of common shares held by non-controlling interests (%)	25.00%	25.00%
Infrastructure [member] | Survial S.A. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares directly held by Parent (%)	100.00%	99.99%
Percentage of common shares held by the Group (%)	100.00%	99.99%
Percentage of common shares held by non-controlling interests (%)		0.01%
Infrastructure [member] | Norvial S.A. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares directly held by Parent (%)	18.20%	67.00%
Percentage of common shares held by Subsidiaries (%)	48.80%
Percentage of common shares held by the Group (%)	67.00%	67.00%
Percentage of common shares held by non-controlling interests (%)	33.00%	33.00%
Infrastructure [member] | Concesin Canchaque S.A. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares directly held by Parent (%)	99.96%	99.96%
Percentage of common shares held by Subsidiaries (%)	0.04%
Percentage of common shares held by the Group (%)	100.00%	99.96%
Percentage of common shares held by non-controlling interests (%)		0.04%
Infrastructure [member] | Concesionaria Vía Expresa Sur S.A. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares directly held by Parent (%)	99.98%	99.98%
Percentage of common shares held by Subsidiaries (%)	0.02%	0.02%
Percentage of common shares held by the Group (%)	100.00%	100.00%
Real estate [member] | Viva GyM S.A. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares directly held by Parent (%)	56.22%	63.44%
Percentage of common shares held by Subsidiaries (%)	43.32%	36.10%
Percentage of common shares held by the Group (%)	99.54%	99.54%
Percentage of common shares held by non-controlling interests (%)	0.46%	0.46%
Parent company operation [member] | Qualys S.A ( Previously Generadora Arabesco S.A.) [member]
Disclosure of subsidiaries [line items]
Percentage of common shares directly held by Parent (%)	100.00%	99.00%
Percentage of common shares held by the Group (%)	100.00%	99.00%
Percentage of common shares held by non-controlling interests (%)		1.00%
Parent company operation [member] | Promotora Larcomar S.A. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares directly held by Parent (%)	46.55%	46.55%
Percentage of common shares held by the Group (%)	46.55%	46.55%
Percentage of common shares held by non-controlling interests (%)	53.45%	53.45%
Parent company operation [member] | Negocios del Gas S.A. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares directly held by Parent (%)	99.99%	99.99%
Percentage of common shares held by Subsidiaries (%)	0.01%	0.01%
Percentage of common shares held by the Group (%)	100.00%	100.00%
Parent company operation [member] | Agenera S.A. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares directly held by Parent (%)	99.00%	99.00%
Percentage of common shares held by Subsidiaries (%)	1.00%	1.00%
Percentage of common shares held by the Group (%)	100.00%	100.00%
Parent company operation [member] | Inversiones en Autopistas S.A.[member]
Disclosure of subsidiaries [line items]
Percentage of common shares directly held by Parent (%)	1.00%	100.00%
Percentage of common shares held by Subsidiaries (%)	99.00%
Percentage of common shares held by the Group (%)	100.00%
Parent company operation [member] | CAM Holding S.p.A. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares directly held by Parent (%)	100.00%	100.00%
Percentage of common shares held by the Group (%)	100.00%	100.00%
Parent company operation [member] | Adexus S.A. [member]
Disclosure of subsidiaries [line items]
Percentage of common shares directly held by Parent (%)	100.00%	99.99%
Percentage of common shares held by Subsidiaries (%)		0.01%
Percentage of common shares held by the Group (%)	100.00%	100.00%

XML

Property, Plant And Equipment, Net And Right-Of-Use Assets - Summary of Depreciation of Fixed Assets and Investment Properties (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of detailed information about property, plant and equipment [line items]
Depreciation related to investment property	S/ (2,356)	S/ (2,319)	S/ (2,310)
Cumulative depreciation	(22,958)
Total depreciation of property, plant and equipment	72,038	123,100	197,484
Discontinued operations [member]
Disclosure of detailed information about property, plant and equipment [line items]
Total depreciation of property, plant and equipment		39,085	90,452
Property, plant and equipment including investment property [member]
Disclosure of detailed information about property, plant and equipment [line items]
Total depreciation of property, plant and equipment	97,352	125,419	199,794
Cost of goods and services [member]
Disclosure of detailed information about property, plant and equipment [line items]
Cumulative depreciation	(20,011)
Total depreciation of property, plant and equipment	95,445	81,199	103,566
Administrative expenses [member]
Disclosure of detailed information about property, plant and equipment [line items]
Cumulative depreciation	(2,947)
Total depreciation of property, plant and equipment	S/ 1,907	S/ 5,135	S/ 5,776

XML

Equity (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Company's Corporate Structure

As of December 31, 2019, the Company’s shareholding structure is as follows:

Percentage of individual interest in outstanding capital	Number of shareholders		Total percentage of interest
Up to 1.00		1,725		12.19	%
From 1.01 to 5.00		16		30.98	%
From 5.01 to 10.00		2		18.34	%
Over 10		2		38.49	%
		1,745		100.00	%

XML

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Significant Accounting Policies

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied in all the years presented, unless otherwise stated.

2.1 Basis of preparation

The consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations issued by the IFRS Interpretations Committee (IFRIC) applicable to companies reporting under IFRS. The financial statements comply with IFRS as issued by the IASB in force as of December 31, 2018, and December 31, 2019, respectively.

The consolidated financial statements have been prepared under the historical cost convention, except for derivative financial instruments, financial assets at fair value through profit or loss, and available-for-sale financial assets measured at fair value. The financial statements are presented in thousands of Peruvian Sol unless otherwise stated.

The preparation of the consolidated financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires that the Management exercise its critical judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

2.2 Consolidation of financial statements

a) Subsidiaries

Subsidiaries are entities over which the Company has control. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date when control ceases.

The Group applies the acquisition method to account for business combinations. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

The Group evaluates the measurement of the non-controlling interest on an acquisition-by-acquisition basis. As of December 31, 2018, and 2019, the measurements of the non-controlling interest in the Group’s acquisitions were made at the non-controlling interest’s proportionate share of the recognized amounts of the acquiree’s identifiable net assets.

Business acquisition-related costs are expensed as incurred.

Any contingent consideration assumed by the Group with the selling party is recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration are recognized in accordance with IFRS 9 “Financial Instruments” as profit or loss.

Goodwill is initially measured as the excess of the acquisition cost, the fair value at the acquisition date of any interest previously acquired plus the fair value of the non-controlling interest, over the net identifiable assets acquired and liabilities and contingent liabilities assumed. If the acquisition cost is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized in profit or loss at the time of acquisition.

For consolidating subsidiaries, balances, income, and expenses from transactions between Group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognized as assets are also eliminated. Group companies use common accounting practices, except for those that are specifically required for specific businesses.

b) Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions, in other words as transactions with owners in their capacity as owners. The difference between the fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interest are also recorded in equity at the time of disposal.

c) Disposal of subsidiaries

When the Group ceases to have control over a subsidiary, any retained interest in the entity is re-measured at its fair value at the date when control is lost, with the change in carrying amount recognized in profit or loss at such date. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that the amount previously recognized in other comprehensive income is reclassified to profit or loss.

d) Joint arrangements

Contracts in which the Group and one or more of the contracting parties have joint control on the relevant joint activities are called joint arrangements.

Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. The Group has assessed the nature of its joint arrangements and determined them to be both joint ventures as well as joint operations.

Joint ventures are accounted for using the equity method. Under this method, interests in joint ventures are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the post-acquisition profits or losses and movements in the comprehensive income statement.

The Group assesses on an annual basis whether there is any objective evidence that the investment in the joint ventures and associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the impairment loss in share of the profit or loss in associates and joint ventures under the equity method of accounting in the income statement. In addition, the Group stops the use of the equity method if the entity ceases to be an operating entity.

Joint operations are joint arrangements whereby the parties that have joint control of the arrangement, have rights over the assets, and obligations for the liabilities, relating to the arrangement. Each party recognizes its assets, liabilities, revenue and cost and its share of any asset or liability jointly held and, on any revenue, or cost arisen from the joint operation.

In the Group, joint operations mainly relate to consortiums (entities without legal personality) created exclusively for the development of a construction contract. Considering that the only objective of the consortium is to develop a specific project, all revenue and costs are included within revenue from construction activities and cost of construction activities, respectively.

e) Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a holding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method (see section d) above).

Profits and losses resulting from transactions between the Group and its associates are recognized in the Group’s consolidated financial statements only to the extent of unrelated investor’s interests in the associates. Unrealized losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates are changed where necessary to ensure consistency with the policies adopted by the Group.

Impairment losses are measured and recorded in accordance with section d) above.

2.3 Segment reporting

Operating segments are reported in a consistent manner with internal reporting provided to the Management of the Group.

If an entity changes the structure of its internal organization in a manner that causes the composition of its reportable segments to change, the Group restates the information for earlier periods unless the information is not available.

2.4 Foreign currency translation

a) Functional and presentation currency

The consolidated financial statements are presented in Peruvian soles, which is the functional and presentation currency of the Group. All subsidiaries, joint arrangements, and associates use the Peruvian Sol as their functional currency, except for foreign entities, for which the functional currency is the currency of the country in which they operate.

b) Transactions and balances

Foreign currency transactions are translated into the functional currency using prevailing the exchange rates at the date of the transactions or valuation when items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in the consolidated income statement, except when deferred in other comprehensive income. Foreign exchange gains and losses of all monetary items are included in the income statement within financial income or expense.

Exchange differences arising on loans from the Company to its subsidiaries in foreign currencies are recognized in the separate financial statements of the Company and separate financial statements of the subsidiaries. In the consolidated financial statements, such exchange differences are recognized in other comprehensive income and are re-classified in the income statement on the disposal of the subsidiary or debt repayment to the extent such loans qualify as part of the “net investment in a foreign operation”.

c) Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency of the Group are translated into the presentation currency as follows:

i) Assets and liabilities for each statement of financial position are translated using the closing exchange rate prevailing at the date of the consolidated statement of financial position;

ii) income and expenses for each income statement are translated at the average exchange rate (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rate on the date of the transaction);

iii) capital is translated by using the historical exchange rate for each capital contribution made; and

iv) all exchange differences are recognized as separate components in other comprehensive income, within foreign currency translations adjustment.

Goodwill and fair value adjustments arising from the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated at the closing exchange rate. Exchange differences are recognized in other comprehensive income.

2.5 Public services concession agreements

Concession agreements signed between the Group and the Peruvian Government entitle the Group, as a Concessionaire, to assume obligations for the construction or improvement of infrastructure and which qualify as public service concessions are accounted as defined by IFRIC 12 “Service Concession Arrangements”. The consideration to be received from the Government for the services of constructing or improving public infrastructure is recognized as a financial asset, an intangible asset or both, as stated below:

a) It is recognized as a financial asset to the extent that it has a contractual right to receive cash or other financial assets either because the Government secures the payment of specified or determinable amounts or because the Government will cover any difference arising from the amounts actually received from public service users in relation with the specified or determinable amounts. These financial assets are recognized initially at fair value and subsequently at amortized cost (financial asset model).

b) It is recognized as an intangible asset to the extent that the service agreement grants the Group a contractual right to charge users of the public service. The resulting intangible asset is measured at cost and is amortized as described in Note 2.15 (intangible asset model).

c) It is recognized as a financial asset and an intangible asset when the Group recovers its investment partially by a financial asset and partially by an intangible asset (bifurcated model).

2.6 Cash and cash equivalents

In the consolidated statements of financial position and cash flows, cash and cash equivalents include cash on hand, on-demand bank deposits, other highly liquid investments with original maturities of three months or less and bank overdrafts. In the consolidated statement of financial position, bank overdrafts are included in the balance of borrowings as current liabilities.

2.7 Financial assets

2.7.1  Classification and measurement

The Group classifies its financial assets, according to its subsequent measurement, in the following categories: i) amortized cost; ii) financial assets at fair value through other comprehensive income and iii) financial assets at fair value through profit or loss. The classification depends on the purpose for which the financial assets were acquired on the basis of the Group’s business model for managing the financial assets and the characteristics of the contractual cash flows of the financial asset.

Management determines the classification of its financial assets at the date of its initial recognition and re-evaluates this classification at the date of each closing of its consolidated financial statements. As of December 31, 2018, and 2019, the Group only maintains financial assets in the following categories:

a) Amortized cost

This category is the most relevant for the Group. The Group measures financial assets at amortized cost if the following conditions are met:

i) The financial asset is held within a business model with the objective of maintaining the financial assets to obtain the contractual cash flows; and

ii) The contractual terms of the financial asset generate cash flows, on specific dates, that are only payments of the principal and interest on the amount of the outstanding principal.

Financial assets at amortized cost are subsequently measured using the effective interest method and are subject to impairment. Profits and losses are recognized in profits or losses when the asset is written off, modified or impaired.

Trade accounts receivable, accounts receivable from related companies, other accounts receivable, work in progress and cash and cash equivalents are included in current assets except for those over twelve months after the date of the consolidated statement of financial position. The latter are classified as non-current assets.

b) Financial assets at fair value through other comprehensive results

Financial assets at fair value through other comprehensive income of the Group are classified in this category when they meet the following conditions:

i) keep them within a business model whose objective is achieved by obtaining contractual cash flows and selling financial assets; and

ii) the contractual terms of the financial asset give rise, on specific dates, to cash flows that are only payments of the principal and interest on the outstanding principal amount.

The investment account at Inversiones en Autopistas S.A. is included in this category.

c) Financial assets at fair value through profit or loss

Financial assets that do not meet the criteria of amortized costs or fair value through other comprehensive income are measured at fair value through profit or loss. The result in a debt investment that is subsequently measured at fair value through gains and losses is recognized in the consolidated statement of comprehensive income in the period in which it occurs.

Financial assets at fair value through profit or loss are non-derivative financial assets designated by the Group at their fair value upon initial recognition and are held for sale. These are included in current assets.

2.7.2 Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights over the cash flows of the financial asset expire, or when it transfers the rights to receive the contractual cash flows in a transaction in which all the risks and benefits of ownership of the financial asset are substantially transferred, or does not transfer or retain substantially all the risks and benefits related to the property and does not retain control over the assets transferred.

The Group participates in transactions in which it transfers the assets recognized in its statement of financial position but retains all or substantially all the risks and advantages of the assets transferred, and/or control over them. In these cases, the assets transferred are not derecognized and are measured on a basis that reflects rights and obligations that the Group has retained.

2.8 Impairment of financial assets

IFRS 9 “Financial Instruments”, requires to register expected credit losses of all financial assets, except for those that are carried at fair value with an effect on results, estimating it over 12 months or for the entire life of the financial instrument (“lifetime”). In accordance with the provisions of the standard, the Group applies the simplified approach (which estimates the loss for the entire life of the financial instrument), for the commercial debtors of the rental business line of the real estate sector, and the general approach for the trade accounts receivables, work in progress and other accounts receivable; the same that requires evaluating whether or not a significant increase in risk exists to determine whether the loss should be estimated based on 12 months after the reporting date or during the entire life of the asset.

The Group has established a policy to conduct an evaluation, at the end of each reporting period, to identify whether the asset has suffered a significant increase in credit risk since the initial date. Both the credit losses expected at 12 months and the expected credit losses during the life of the asset are calculated individually or collectively, depending on the nature of the portfolio.

For financial assets for which the Group has no reasonable expectation of recovering, either the entire outstanding amount or a portion thereof, the gross carrying amount of the financial asset is reduced. This is considered a decrease in (partial) accounts of the financial asset.

2.9 Derivative financial instruments and hedging activities

Derivatives are initially recognized at fair value on the date a derivative contract is signed into and are subsequently re-measured at their fair value at the end of each reporting period. The method for recognizing the gain or loss resulting from changes in the fair value of the derivatives depends on whether they are designated as  hedging instrument, and if so, the nature of the item being hedged.

The Group designates certain derivatives as hedges of a particular risk associated with a recognized asset or liability (fair value hedge) or a highly probable forecast transaction (cash flow hedge). Derivatives are initially recognized at fair value on the date of subscription of the contract and are subsequently recognized at their fair value.

The Group documents, at the inception of the transaction, the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedges transactions. The Group also documents its assessment, both at hedge inception as at the date of each subsequent statement of financial position, of whether the derivatives used in hedges transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

The fair value of various derivative instruments used for hedging purposes and changes in the account reserves for hedges in equity are disclosed in Note 8. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity period of the hedged item is more than 12 months and as a current asset or liability when the remaining maturity period of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability.

Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as fair value hedges is recognized as other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in the income statement. Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss (for example, when the forecasted sale that is hedged takes place).

The gain or loss relating to the effective portion of interest rate swaps hedging variable rate borrowings is recognized in the income statement as “Financial income or Financial expenses”.

However, when the forecasted transaction that is hedged results in the recognition of a non-financial asset (for example, inventory or fixed assets), the gains or losses previously deferred in equity are transferred from equity and are included in the initial measurement of the cost of the non-financial asset. The deferred amounts are finally recognized in cost of goods sold in the case of inventory or depreciation in the case of fixed assets.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and will be reversed to income when the forecasted transaction is finally recognized in the statement of comprehensive income. When a forecasted transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement within “other income and expenses, net”.

2.10 Trade accounts receivables

Trade receivables are amounts due from customers for goods or services sold by the Group. If the collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets. In the Infrastructure segment, it includes the billing of the first purchase of trains as part of the model of the financial asset of the concessionaire GyM Ferrovías S.A (Note 2.5).

Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less any provision for impairment, except for receivables of less than one year that are stated at a nominal amount which is similar to their fair values since they are short term.

It includes management estimates related to the collection rights for services performed pending invoice and/or approval by client, which have been valued using the completion percentage method. It corresponds mainly to the Engineering and Construction segment (subsidiaries GyM S.A. and GMI S.A.). Regarding estimates in concessions, at the Infrastructure segment, corresponds to unconditional contractual collection rights to receive from the Grantor under the model of the financial asset (Note 2.5).

2.11 Work in progress

This account includes the balance of work in progress costs incurred that relates to future activities of the construction contracts and the constructions phase in concessions (see Note 2.26 for detail on revenue recognition from construction activities and concessions services).

Changes in estimates of contract revenues and costs can increase or decrease the estimated margin. When a change in the estimate is known, the cumulative impact of the change is recorded in the period in which it is known, based on the progress completed.

2.12  Inventories

The inventories include land, works in progress and finished buildings related to the real estate activity, materials used in the construction activity and marketed supplies for exploration and extraction activities.

a) Real estate activity

Land used for the execution of real estate projects is recognized at acquisition cost. Work in progress and finished real estate includes the costs of design, materials, direct labor, borrowing costs (directly attributable to the acquisition, construction, production of the asset), other indirect costs and general expenses related to the construction.

Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Annually, the Group reviews whether inventories have been impaired identifying three groups of inventories to measure their net realizable value: i) land bought for future real estate projects which are compared to their net appraisal value; if the acquisition value is higher, a provision of impairment is recognized; ii) land under construction, impairment is measured based on cost projections; if these costs are higher than selling prices of each real estate unit, an impairment estimated is recorded; and iii) completed real estate units; these inventory items are compared to the selling prices less selling expenses; if these selling expenses are higher, a provision for impairment is recorded.

For the reductions in the carrying amount of these inventories to their net realizable value, a provision is recognized for impairment of inventories with a charge to profit or loss for the year in which those reductions occur.

b) Exploration and extraction activities

Inventories are valued at production costs or net realizable value (NRV), the one with the lowest result, on the basis of the weighted average method. The NRV represents the value at which it is estimated to make oil, gas and its derivatives LPG and HAS, which is calculated on the basis of international prices at which discounts that are usually granted are deducted. Miscellaneous supplies, materials, and spare parts are valued at cost or replacement value, whichever is less based on the average method. The cost of inventories excludes financing expenses and exchange differences. Inventories to be received are recorded at cost by the specific identification method.

The Group constitutes a devaluation of materials charged to income for the year in cases in which the book value exceeds its recoverable value.

c) Other activities

Materials and supplies are recorded at cost by the weighted average method or at their replacement value, the lower. The cost of these items includes freight and non-refundable applicable taxes.

The devaluation of these items is estimated on the basis of specific analyses made by the Management on its rotation. If it is identified that the book value of the stocks of materials and supplies exceeds their replacement value, the difference is charged to income in the year in which this situation is determined.

Management considers that as of the date of the consolidated financial statements it is not necessary to establish additional provisions to those recognized in the financial statements to cover losses due to obsolescence of these inventories.

2.13  Investment property

Investment properties are shown at cost less accumulated depreciation and impairment losses, if any. Subsequent costs attributable to investment properties are capitalized only if it is probable that future economic benefits will flow to the Company and the cost of these assets can be measured reliably; if not, they are recognized as expenses when incurred.

Repair and maintenance expenses are recognized in profit and loss when they are incurred. If the property’s carrying amount is greater than its estimated recoverable amount, an adjustment to reduce the carrying amount to the recoverable amount is recognized.

Depreciation is determined by the straight-line method at a rate that is considered sufficient to absorb the cost of the assets and the end of the useful life and considered their significant components with useful lives substantially different (each component is treated separately for depreciation purposes). The estimated useful lives of those properties range from 3 to 33 years.

The investment properties held by the Group correspond to: (i) “Agustino Plaza” Shopping Center, located in the El Agustino District, and (ii) the stores situated within the stations of Line 1 of the Lima Metro; the properties owned by the subsidiary Viva GyM S.A. are represented by a fair value amount to US$18.7 million, equivalent to S/62.6 million as of December 31, 2019 (US$19.2 million, equivalent to S/64.3 million, as of December 31 of 2018).

These investment properties have been leased under the modality of an operating lease.

2.14  Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of these items.

Subsequent costs are included in the asset’s carrying amount or are recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Repairs and maintenance expenditures are charged to the statement of income during the financial period in which they are incurred.

Assets under construction are capitalized as a separate component. At their completion, the cost of such assets is transferred to their definitive category.

Replacement units are major spare parts in which depreciation starts when the units are installed for use within the related asset.

Depreciation of machinery, equipment and vehicles recognized as “Major equipment” are depreciated based on their hours of use. Under this method, the total number of work hours that machinery and equipment are capable of producing is estimated and a charge per hour is determined. The depreciation of other assets that do not qualify as “Major equipment” is calculated under the straight-line method to allocate their cost less their residual values over their estimated useful lives, as follows:

	Years
Buildings and facilities		Between 3 and 33
Machinery and equipment		Between 4 and 10
Vehicles		Between 2 and 10
Furniture and fixtures		Between 2 and 10
Other equipment		Between 2 and 10

Residual values and useful lives are reviewed and adjusted as appropriate at each reporting date. Gains and losses on disposals are recognized in “Other income and expenses, net” in the statement of income. Regarding joint operations that carry out construction activities, the difference between the proceeds from disposals of fixed assets and their carrying amount is shown within “revenue from construction activities” and “cost of construction activities”, respectively.

2.15  Intangible assets

i) Goodwill

Goodwill arises on the acquisition of subsidiaries and represents the excess of the purchase consideration, the amount of any non-controlling interest and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the net identifiable assets acquired. If the payment made, the amount of the non-controlling interest recognized and previously held interest measured at fair value is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statement of income.

Goodwill acquired in a business combination is allocated to each cash-generating units (CGU), or group of CGUs, that is expected to benefit from the synergies of the combination. Goodwill is monitored at the operating segment level.

Goodwill impairment reviews are performed at least annually and when events or changes in circumstances indicate a potential impairment. Any impairment is recognized immediately as an expense in item “Other income and expenses, net” and cannot be reversed later.

ii) Trademarks

Trademarks acquired separately are shown at historical cost. Trademarks acquired in a business combination are recognized at fair value at the acquisition date. Management has determined that these trademarks have indefinite useful lives.

Trademark impairment reviews are performed at least annually and when events or changes in circumstances indicate a potential impairment. Any impairment is recognized immediately as an expense in item “Other income and expenses, net”. The carrying amount that has been subject to impairment is reviewed at each reporting date to verify possible reversals of the impairment and is recognized in the “other income and expenses, net” item.

iii) Concession rights

The intangible asset consisting of the right to charge users for the services related to service concessions agreements (Note 2.5 and Note 6.b) is initially recorded at the fair value of construction or improvement services and before amortization is started, an impairment test is performed; it is amortized under the straight-line method, from the date revenue starts using the lower of its estimated expected useful life or effective period of the concession agreement.

iv) Contractual relationships with customers

Contractual relationships with customers are assets resulting from business combinations that were initially recognized at fair value as determined based on the expected cash flows from those relations over a period based on the estimated permanent of the Group’s customer (the estimation of useful life is based on the term of the contract with customers which fluctuate between 5 and 9 years). The useful life and the impairment of these assets are individually assessed.

v) Cost of development wells

Costs incurred to prepare the wells to extract hydrocarbons from Blocks I and V are capitalized as part of the intangible asset. The Group capitalizes the costs of the development phase associated with wells preparation for extraction. The last investment made in these wells were in 2015. These costs are amortized based on the useful lives of the wells (5 years for the oil lots). The produced units method applies to license agreements for Blocks III and IV. In 2017, the Group has considered depreciation or amortization for the wells in Block IV based on produced units, as well as the tangible proportional part of the wells.

vi) Software and development costs

Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognized as intangible assets when the following criteria are met:

• technically feasible to complete the software product so that it will be available for use.

• management intends to complete the software product and use or sell it.

• there is the ability to use or sell the software product.

• it can be demonstrated how the software product will probably generate future economic benefits.

• technical, financial and other resources are available to complete the development and to use or sell the software product; and

• expenses incurred during its development can be reliably measured.

Other development costs that do not meet these criteria are recognized in the statement of income as incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period. Computer software development costs recognized as assets are amortized over their estimated useful lives, which fluctuate between 2 to 15 years.

vii) Land use rights

Refers to the rights maintained by the subsidiary Promotora Larcomar S.A. Land use of rights are stated at historical cost less amortization and any accumulated impairment losses. The useful life of this asset is based on the agreement signed (60 years) and may be extended if agreed by parties. Amortization will begin when it becomes ready for its intended use by Management.

2.16  Impairment of non-financial assets

Assets subject to amortization are subject to impairment tests when events or circumstances occur that indicate that their book value may not be recovered. Impairment losses are measured as the amount by which the book value of the asset exceeds its recoverable value. The recoverable value of the assets corresponds to the higher of its fair value and its value in use. For purposes of the impairment assessment, assets are grouped at the lowest levels in which they generate identifiable cash flows (cash-generating units). The book value of non-financial assets other than goodwill that have been subject to write-offs for impairment is reviewed at each reporting date to verify possible reversals of impairment.

2.17 Financial liabilities

The financial liabilities of the Group include trade accounts payable, accounts payable to related parties, remuneration and other accounts payable. All financial liabilities are initially recognized at fair value and subsequently valued at amortized cost using the effective interest rate method.

Financial liabilities are classified as current liabilities if the payment must be made within a year or less (or in the normal operating cycle of the business if it is greater). Otherwise, they are presented as non-current liabilities.

2.18 Trade accounts payable

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Accounts payable are initially recognized at their fair value and subsequently are amortized at amortized cost using the effective interest method, except for accounts payable within less than one year that are recorded at their nominal value that is similar to their fair value due to its maturity in the short term.

2.19 Other financial liabilities

Corresponds to the loans and bonds issued by the Group, which are initially recognized at their fair value, net of the costs incurred in the transaction. These financial liabilities are subsequently recorded at amortized cost; any difference between the funds received (net of transaction costs) and the redemption value is recognized in the statement of income during the period of the loan using the effective interest method.

The costs incurred to obtain these financial liabilities are recognized as transaction costs to the extent that it is probable that part or the entire loan will be received. In this case, these charges are deferred until the time the loan is received.

2.20 Borrowing costs

Debt costs are recognized at the statement of income in the period in which they have been incurred, except for intangible assets and inventories in which the borrowing costs are capitalized.

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualified assets, which are assets that necessarily take a substantial period (more than 12 months) to reach their condition of use or sale, are added to the cost of said assets until the period when the assets are substantially ready for use or sale. The Group suspends the capitalization of borrowing costs during the periods in which the development of activities of a qualified asset has been suspended. The income obtained from the temporary investment of specific loans that have not yet been invested in qualified assets is deducted from the borrowing costs eligible for capitalization.

2.21 Current and deferred income tax

Income tax expense comprises current and deferred tax. Tax expense is recognized in the statement of income, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, tax is also recognized in the statement of comprehensive income or directly in equity, respectively.

The current income tax is calculated based on the tax laws enacted at the date of the statement of financial position in the countries where the Company and its subsidiaries operate and generate taxable income. Management, where appropriate, establishes provisions based on amounts expected to be paid to the tax authorities.

Deferred tax is recognized on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred income tax is determined using tax rates (and legislation) that have been enacted as of the date of the statement of financial position and that are expected to be applicable when the deferred income tax is realized or paid.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Group, and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax arising from the initial recognition of goodwill is not recognized; likewise, the deferred tax is not recorded if it arises from the initial recognition of an asset or liability in a transaction that is not a business combination that does not affect the accounting or tax profit or loss at the time of the transaction.

2.22 Employee benefits

The Group recognizes a liability when the employee has rendered services in exchange for which is entitled to receive future payments and an expense when the Group has consumed the economic benefit from the service provided by the employee in exchange for the benefits in question.

The Group determines employee benefits in accordance with current labor and legal regulations and classifies them as short-term benefits, post-employment benefits, long-term benefits, and termination benefits.

Short-term benefits are those other than termination indemnities, whose payment is settled in the twelve months following the end of the period in which the employees have rendered the services; they correspond to current remunerations (salaries, wages and contributions to social security), annual paid and sick absences, participation in profits and incentives and other non-monetary benefits.

Post-employment benefits are those other than termination benefits that are paid after completing the period of employment with the entity. Retirement benefits or post-employment benefit plans can be classified into (i) Defined contribution plans and (ii) Defined benefit plans. The Group maintains defined benefit plans and therefore assumes the actuarial risk.

Long-term benefits are those benefits that must be paid more than twelve months after the end of the period in which the services were rendered. As of December 31, 2018, and 2019, the Group does not grant benefits in this category.

Termination benefits are those benefits payable as a result of (i) the entity’s decision to terminate the employee’s contract before the retirement date, and (ii) the employee’s decision to voluntarily accept the conclusion of the relationship of work.

Short-term benefits:

a) Current salaries and wages

The current remunerations are constituted by salaries, wages, contributions to social security, statutory bonuses and compensation for the time of services. Salaries, wages, and contributions to social security are settled on a monthly basis.

Entities of the Group recognize the expense and the related liability for statutory bonuses based on applicable laws and regulations effective in Peru, Chile, and Colombia. In Peru bonuses correspond to two monthly payments, settled one in July and one in December of each year, and accrue based on the consideration of the service.

The compensation for the time of service corresponds to the indemnification rights of the staff, and is accrued based on the consideration of the service calculated according to the legislation in force in each country in which the entities of the Group operate and determine as follows: (i) in Peru it is equivalent to half the remuneration in force at the date of payment through a deposit in bank the workers’ accounts in May and November of each year; (ii) In Colombia, it is equivalent to 8.33% of the monthly remuneration, (iii) In Chile this benefit is not available.

b) Annual paid absences

Annual holidays are recognized on an accrual basis. The provision for the estimated obligation for the annual vacations of personnel resulting from the services rendered by employees is recognized on the date of the consolidated statement of financial position and corresponds; (i) one month for personnel in Peru, (ii) fifteen days for personnel in Colombia, and (iii) in the case of Chile, they are subject to the worker’s seniority and range from fifteen to thirty days.

c) Workers’ profit sharing and incentives

The workers’ profit sharing is determined on the basis of the legal provisions in force in each country where the entities of the Group operate, as follows: (i) in Peru it is equivalent to 5% of the taxable base determined by each entity of the Group, in accordance with current income tax legislation, (ii) in Chile, workers’ participation is a component of the remuneration (equivalent to 4.75 minimum wages per year) and not a determinable percentage of the profit, (iii) in Colombia these benefits are not provided to employees.

Post-employment benefits

The indirect subsidiary Cam Chile Spa has a pension plan for its staff. The liability recognized in the statement of financial position with respect to defined benefit plan is measured based on the present value of the obligation at the end of the reporting period less the fair value of the planned assets.

The present value of the defined benefit obligations is determined by discounting the estimated future cash flows using the interest rates of high-quality corporate bonds denominated in the currency in which the benefits will be paid and with maturity periods similar to the obligations for pension plans. In countries where there is no market with instruments with similar characteristics, the market rate of government bonds will be used.

The remeasurements that arise from adjustments and changes in the actuarial assumptions are recorded in other comprehensive income in the period in which they arise.

Termination benefits

The Group entities recognize the liability and expense for severance payments when they occur, based on the legal provisions in force in each country. In accordance with the legislation of Peru, the compensation for arbitrary dismissal for personnel with an indefinite contract amounts to 1.5 times the monthly remuneration for each year worked.

In Colombian legislation, for the first year worked, the equivalent of 30 days of salary is granted, and from the second year on, the compensation will be the equivalent of 20 days of salary for each additional year (or the proportion); in the legislation of Chile is granted compensation of thirty days of salary for each year worked with a maximum salary of 330 days.

2.23 Provisions

a) General

Provisions are recognized when i) the Group has a present, legal or constructive obligation as a result of past events; ii) it is probable that an outflow of resources will be required to settle the obligation; and iii) the amount has been reliably estimated. Provisions are reviewed at year - end. If the time value of money is significant, provisions are discounted using a pre-tax rate that reflects, when applicable, the specific risks related to the liability. Reversal of the discount due to the passage of time results in the obligation being recognized with a charge to the statement of income as a financial expense.

Contingent obligations when their existence will only be confirmed by future events or their amount cannot be reliably measured. Contingent assets are not recognized and are disclosed only if it is probable that the Group will generate an income from economic benefits in the future.

b) Provision for the closure of production wells

The subsidiary GMP S.A. recognizes a provision for the closure of operating units that correspond to the legal obligation to close oil production wells once the production phase has been completed. At the initial date of recognition, the liability that arises from this obligation measured at its fair value and discounted at its present value, according to the valuation techniques established by IFRS 13, “Fair Value Measurement”, and is simultaneously charged to the intangible account in the consolidated statement of financial position.

Subsequently, the liability is increased in each period to reflect the financial cost considered in the initial measurement of the discount, and the capitalized cost is depreciated based on the useful life of the related asset. When a liability is settled, the subsidiaries recognize any gain or loss that may arise. The fair value changes estimated for the initial obligation and the interest rates used to discount the flows they are recognized as an increase or decrease in the book value of the obligation and the asset to which they relate to, any decrease in the provision, and any decrease of the asset that may exceed the carrying amount of said asset is immediately recognized in the consolidated statement of income.

If the review of the estimated obligation results in the need to increase the provision and, accordingly, increase the carrying amount of the asset, the subsidiaries should also take into consideration if the said increase corresponds to an indicator that the asset has been impaired and, if so, impairment tests are to be carried out (Note 2.16).

2.24 Put option arrangement

The subsidiary GyM S.A. signed a sale option contract on the equity of its subsidiary Morelco SAS (Note 32 a) that allows the shareholder to reallocate its shares over a period of 10 years. The amount payable under the option is initially recognized at the present value of the reimbursement under “Other accounts payable”, directly charged to equity. The charge to equity is recorded separately as put options subscribed on the non-controlling interest, adjacent to the non-controlling interest in the net assets of the consolidated subsidiaries.

Subsequently, the financial liability is updated by changes in the assumptions on which the estimation of the expected cash flows is based and by the financial component due to the passage of time. The effects of this update are recognized in results. In the event that the option expires without being exercised, the liability is written off with the corresponding adjustment to equity.

2.25 Capital

Common shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity, as a deduction, of the proceeds, net of taxes.

2.26 Revenue recognition from contracts with customers

Revenues from contracts with customers are recognized, for each performance obligation, either during a period of time or at a specific time, depending on which method best reflects the transfer of control of the underlying products or services to the obligation of particular performance with the client.

The Group recognizes the income through the application of the five steps defined in the regulation i) identification of the contract with the client; ii) identification of performance obligations in the contract; iii) determination of the price of the transaction; iv) allocation of the transaction price for performance obligations; and v) recognition of income when (or as) a performance obligation is satisfied.

Subsequently, the Group policy of recognition of each type of income according to IFRS 15:

i) Engineering and construction

Revenues from engineering and construction contracts are recognized over time as the Company performs its obligations because there is a continuous transfer of control of the deliverable to the customer pursuant to the terms of such contracts. For this reason, the Company accounts for revenue over time by measuring the progress towards complete satisfaction of its performance obligations under each contract. In this manner, revenues are accounted for using the percentage-of-completion method, based on surveys of performance by the Company’s experts who review the work performed to date under each contract.

The Company recognizes revenue based on surveys of work to date, using the output method, which is the direct measurement of the value to the customer of the construction services completed to date relative to the remaining services to be performed under the contract. The Company believes that the use of the output method based on surveys of performance provides a faithful depiction of the transfer of services by the Company to the customer because it reflects an enforceable right to payment from the Company for the work completed to date.

The contract generates assets when the costs incurred are greater than the cost associated with those revenues. Otherwise liabilities are generated for the accrued costs not invoiced. When it is probable that the total costs of the contract will exceed the related revenue, the expected loss is immediately recognized.

Revenues for additional work resulting from a modification or an instruction received from the customer to make a change in the scope of work or the price, or both, will result in an increase in contract revenue. The Company does not account for contract modifications unless approved by the customer. In addition, the Company reviews the enforceability of changes to the rights and obligations in contract modifications.

As part of its evaluation of whether changes to the rights and obligations in a contract modification are enforceable, the Company considers whether one or more of the following factors has been satisfied: a) the contract, applicable law or other evidence provides a legal basis for the modification; b) additional costs were caused by circumstances that were unforeseen on the date of execution of the contract and not a result of deficiencies incurred by the Company’s performance; c) modification-related costs are identifiable and considered reasonable in view of the work performed; or d) evidence supporting the modification is objective and verifiable. When one or more of the foregoing factors is satisfied, the changes to the rights and obligations in the contract modification are considered by the Company to be enforceable.

The Company estimates the change in the transaction price arising from the contract modification if the transaction price has not yet been approved by the customer in accordance with the requirements of IFRS 15 to estimate variable consideration. In order to include variable consideration related to a contract modification in the estimated transaction price, the Company must conclude that it is ‘highly probable’ that a significant revenue reversal will not occur. The Company determines the probability that the revenue reversal will occur (and therefore whether such price will be recovered) based on an analysis of whether any of the following factors is present: i) contractual entitlement; ii) past practices with the customer; iii) specific discussions or preliminary negotiations with the customer; and iv) verbal approval by the customer. If, as a result of such analysis, the Company concludes that it is ‘highly probable’ that a significant reversal in the amount of revenue recognized will not occur, it recognizes the variable consideration relating to the contract modification.

When the contract profit cannot be estimated reliably, the associated revenue is recognized to the extent of costs incurred are recoverable. Revenue is billed once approval is received by the owners of the work in progress.

The nature of certain of the Company’s contracts, namely cost-plus fee contracts in its E&C segment and unit price or similar contracts in its E&C segment and certain services it provides in its Infrastructure segment, give rise to variable consideration. Depending on the type of contract, this variable consideration may include reimbursable or target costs; variable number of units; award and incentive fees; and penalties. The Company estimates the amount of revenue to be recognized as variable consideration using the expected value method or the most likely amount method, whichever is expected to better predict the amount of consideration to which the Company will be entitled. These methods require the Company to estimate costs, unit quantities, award/incentive fees and penalties. In making such estimates, judgments are required to evaluate potential variances in the cost of materials, the cost of labor, productivity levels, the impact of change orders, liability claims and contract disputes, the achievement of contractual performance standards, and other contingencies.”

ii) Real-estate – Real estate, urban and industrial lots

Sale of Real estate

Revenue from sales of real estate properties is recognized when control over the property has been transferred to the client with the delivery record. Revenue is measured based on the price agreed under the contract. Until this is met, the incomes received will be counted as customer advances. These sales contracts have two performance obligations: i) the one corresponding to the transfer of the property, which includes the common areas of the building where these real estates are located, and ii) the one corresponding to the transfer of the common area outside the real estate assets but that are part of the real estate projects, which are recognized when the common area has been delivered.

Sale of urban lots

Revenue related to sales of urban lots is recognized when control over the property is transferred to the customer. Until this is met, the incomes received will be recognized as customer advances. Revenue is measured based on the transaction price agreed under the contract. These sales contracts have a single performance obligation for the sale of lots, which is executed upon delivery of the sale of the assets.

Sale of industrial lots

Revenue related to sales of industrial lots is recognized when control over the property has been transferred to the customer. Until this is met, the incomes received will be counted as customer advances. These sales contracts have two performance obligations: i) transfer of the industrial lot and ii) urban authorization of the industrial lot.

iii) Infrastructure

Revenue for provided services of oil and gas extraction, fuel dispatch and other services

The revenue from providing these services is recognized at the time the service is provided, calculating the service actually provided as a portion of the total services to be provided. This type of income has a single performance obligation; that is performed when the service is provided at a time moment.

Revenue from the sale of oil and derivative products

Revenue from the sale of goods is recognized when the control of the assets is transferred to the customer, which is when the goods are delivered. In this type of income there is only one performance obligation for the sale of oil; which is executed at the delivery of the goods.

Revenue from concession services

Revenues from concession services correspond to operation and maintenance services and are recognized according to their nature in the period in which the service is provided. In this revenue there is only one performance obligation, executed when the service is provided.

2.27 Recognition of cost and expenses

Engineering and construction contracts

Contract costs include all direct costs such as materials, labor, subcontracting costs, manufacturing and supply costs of equipment, start-up costs, depreciation and amortization, and indirect costs. Periodically, the Group evaluates the reasonableness of the estimates used in the determination of the total estimated contract cost. If, as a result of this evaluation, there are modifications to the revenue or cost previously estimated, or if the total estimated cost of the project exceeds expected revenues, an adjustment is made in order to reflect the effect in results of the period in which the adjustment or loss is incurred.

Costs for sale of oil and derivative products

The costs of the services rendered and the costs of sales of petroleum and derivative products are recognized when they are incurred, simultaneously with the recognition of related revenues. Other costs and expenses are recognized as they accrue, regardless of when they are paid and are recorded in the accounting periods to which they relate.

Costs for concession operation services

The costs of the operation and maintenance services are recognized when they are incurred, simultaneously with the recognition of related revenues. Other costs and expenses are recognized as they are accrued, regardless of when they are paid and are recorded in the accounting periods with which they are related.

2.28 Leases

Lease contracts are analyzed for the purpose of identifying those containing the characteristics according to IFRS 16 Leases (hereinafter “IFRS 16”) for recognition, measurement, presentation and disclosure.

The Group evaluates in every lease contract the following:

• If it has the right to control the use of the identified asses,

• If the contract term is longer than twelve months,

• If the underlying asset amount is a material amount, and,

• That the fees to be paid are not entirely variable.

a) Leases in which the Group is a lessee

The Group recognizes a right-of-use asset and a lease liability as of the beginning of the lease.

The right-of-use asset is initially measured by the initial amount of the lease liability adjusted for any lease payment made on or before the start date, plus the initial direct costs incurred. The right-of-use assets are depreciated in a straight line, from the start date until the end of the lease contract. The term of the lease includes the periods covered by an option to extend the contract if the Group is reasonably sure to exercise that option.

The lease liability is the total unpaid installments, measured at amortized cost using the effective interest method. It is measured again when there is a change in future lease payments that arise from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be paid under a residual value guarantee, or if the Group changes its assessment of whether it is sure that it will exercise a purchase, extension or term option.

When the lease liability is measured again, the carrying amount of the right-of-use asset is adjusted.

In the engineering and construction segment, interest expenses related to leasing contracts of the core business are reported in the gross margin; the rest of the group segments, report them in financial expenses.

Operational cash flows will be greater since cash payments for the main portion of the lease debt are classified within the financing activities. Only the part of the payments that reflects interest can continue to be presented as operating cash flow.

b) Leases in which the Group is a lessor

Liabilities for operating leases and assets are included in the statement of financial position according to the nature of the asset. Revenues from operating leases are recognized in a straight line over the term of the lease agreement and the incentives granted to lessees are reduced from rental income.

Based on the foregoing, the Group as lessor has not changed the recognition of its leases.

c) Treatment before the implementation of IFRS 16

Leases in which the Group is a lessee

Operating leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases, including prepayments (net of any incentives received from the lessor) are recognized in the consolidated income statement under the straight-line method over the lease term. The Group’s major kinds of operating leases are leases of machinery, computer equipment, printing equipment, among others.

Finance leases

Leases in which the Group substantially assumes all the risks and rewards of ownership of an asset are classified as finance leases. Each lease payment is allocated between the liability and finance charges to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The corresponding rental obligations, net of finance charges, are included in other payables, short- and long-term in the consolidated statement of financial position. The interest element of the finance cost is charged to the consolidated income statement of over the lease periods to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the useful life of the asset or the lease term.

2.29 Dividend distribution

Dividend distribution to the Group shareholders is recognized as a liability in the financial statements in the period in which the dividends are approved.

2.30 Significant non-operating items

Significant non-operating items are separately shown in the financial statements when they are necessary to provide an adequate understanding of the Group’s financial performance. These material items are income or expenses shown separately due to their nature or significant amount.

2.31 Discontinued operations as of December 31, 2017 and December 31, 2018

a) Restatement of the Statement of Income as of December 31, 2017 (was restructured in the 2018 annual report, presented on April 30, 2019)

The consolidated statement of income for the year ended December 31, 2017 included the net gain on the sale of our former subsidiary GMD (S/218.3 million, equivalent to US$64.6 million) under the “Gain from the sale of investments” line item, rather than the “Profit from discontinued operations” line item, in accordance with IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, such amount has been restated in application of IFRS 5 paragraph 33 a).

	2017 Audited			Restatement GMD			Reclassification discontinued operations (*)			2017 Restated and Reclassified
Revenues		6,080,142			—			(2,066,129	)		4,014,013
Operating costs		(5,407,355	)		—			1,895,794			(3,511,561	)
Gross profit (loss)		672,787			—			(170,335	)		502,452
Administrative expenses		(429,181	)		—			106,727			(322,454	)
Other (expenses) income, net		(20,545	)		—			(12,324	)		(32,869	)
Gain (loss) from the sale of investments		274,363			(218,264	)		(21,554	)		34,545
Operating profit (loss)		497,424			(218,264	)		(97,486	)		181,674
Financial expenses		(185,445	)		—			34,668			(150,777	)
Financial income		15,407			—			(1,665	)		13,742
Share of the profit or loss in associates and joint ventures		1,327			—			(854	)		473
Profit (loss) before income tax		328,713			(218,264	)		(65,337	)		45,112
Income tax		(123,037	)		63,940			12,792			(46,305	)
Profit (loss) from continuing operations		205,676			(154,324	)		(52,545	)		(1,193	)
Profit from discontinued operations		3,562			154,324			52,545			210,431
Profit of the year		209,238									209,238
Earnings per share attributable to owners of the Company during the year		0.225									0.225
Earning (loss) per share from continuing operations attributable to owners of the Company during the year		0.220									(0.101	)

(*) Corresponds to financial result from discontinued operations, Stracon GyM S.A., CAM Servicios del Peru S.A., CAM Chile S.A. and Adexus S.A.

b) Reclassified discontinued operations as of December 31, 2018

As a result of the divestment process, the results of discontinued operations are reclassified as follows:

	2018 Audited			Reclassification discontinued operations			2018 Reclassified
Profit for the year		57,415			—			57,415
Other comprehensive income:
Items that will not be reclassified to profit or loss
Remeasurement of actuarial gains and losses, net of tax		16,589			—			16,589
Items that may be subsequently reclassified to profit or loss
Cash flow hedge, net of tax		119			—			119
Foreign currency translation adjustment, net of tax		5,733			—			5,733
Exchange difference from net investment in a foreign operation, net of tax		(8,147	)		—			(8,147	)
		(2,295	)		—			(2,295	)
Other comprehensive income for the year, net of tax		14,294			—			14,294
Total comprehensive income for the year		71,709			—			71,709
Comprehensive income attributable to:
Owners of the Company		(67,548	)		—			(67,548	)
Non-controlling interest		139,257			—			139,257
		71,709			—			71,709
Comprehensive income attributable to owners of the Company:
Continuing operations		(98,942	)		(32,342	)		(131,284	)
Discontinued operations		31,394			32,342			63,736
		(67,548	)		—			(67,548	)

XML

Bonds (Tables)

12 Months Ended

Dec. 31, 2019

Statement [line items]

Summary of Bonds Issued

As of December 31, this item includes:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
GyM Ferrovías S.A. (a)		611,660		618,497		13,422		15,742		598,238		602,755
Norvial S.A. (b)		325,382		305,545		25,745		28,995		299,637		276,550
		937,042		924,042		39,167		44,737		897,875		879,305

GyM Ferrovias S.A. [member]

Statement [line items]

Bonds

	2017			2018			2019
Balance at January, 1		604,031			603,657			611,660
Amortization		(19,141	)		(10,178	)		(11,330	)
Accrued interest		49,132			48,130			48,253
Interest paid		(30,365	)		(29,949	)		(30,086	)
Balance at December, 31		603,657			611,660			618,497

Norvial S.A. [member]

Statement [line items]

Bonds

	2017			2018			2019
Balance at January, 1		363,684			343,910			325,382
Amortization		(20,010	)		(18,736	)		(20,005	)
Accrued interest		2,987			24,170			23,482
Capitalized interest		26,011			3,361			2,725
Interest paid		(28,762	)		(27,323	)		(26,039	)
Balance at December, 31		343,910			325,382			305,545

XML

Critical Accounting Estimates And Judgments - Summary of Sensitivity Analysis Based on 10% Increase/Decrease in Assumptions of Gross Margin, Discount Rate, Terminal Growth Rate (Detail)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Goodwill [member] | Engineering and Construction [member]
Disclosure Of Sensitivity Analysis [line items]
Effect of ten percent decrease in assumptions of gross margin on percentage of recoverable amount, percent	(25.54%)	0.51%
Effect of ten percent decrease in assumptions of discount rate on percentage of recoverable amount, percent	(4.30%)	39.19%
Effect of ten percent decrease in assumptions of terminal growth rate on percentage of recoverable amount, percent	(16.31%)	18.48%
Effect of ten percent increase in assumptions of gross margin on percentage of recoverable amount, percent	(4.25%)	41.12%
Effect of ten percent increase in assumptions of discount rate on percentage of recoverable amount, percent	(23.09%)	6.65%
Effect of ten percent increase in assumptions of terminal growth rate on percentage of recoverable amount, percent	(13.38%)	23.30%
Goodwill [member] | Electromechanical [member]
Disclosure Of Sensitivity Analysis [line items]
Effect of ten percent decrease in assumptions of gross margin on percentage of recoverable amount, percent	35.63%	(9.73%)
Effect of ten percent decrease in assumptions of discount rate on percentage of recoverable amount, percent	48.89%	29.36%
Effect of ten percent decrease in assumptions of terminal growth rate on percentage of recoverable amount, percent	42.36%	12.90%
Effect of ten percent increase in assumptions of gross margin on percentage of recoverable amount, percent	52.97%	38.89%
Effect of ten percent increase in assumptions of discount rate on percentage of recoverable amount, percent	39.92%	2.97%
Effect of ten percent increase in assumptions of terminal growth rate on percentage of recoverable amount, percent	46.32%	16.34%
Trademark [member] | Morelco S.A.S. [member]
Disclosure Of Sensitivity Analysis [line items]
Effect of ten percent decrease in assumptions of revenue growth rate on percentage of recoverable amount, percent	22.14%	75.00%
Effect of ten percent increase in assumptions of revenue growth rate on percentage of recoverable amount, percent	60.11%	116.27%
Effect of ten percent decrease in assumptions of discount rate on percentage of recoverable amount, percent	63.02%	126.00%
Effect of ten percent decrease in assumptions of terminal growth rate on percentage of recoverable amount, percent	37.49%	91.70%
Effect of ten percent increase in assumptions of discount rate on percentage of recoverable amount, percent	23.56%	72.33%
Effect of ten percent increase in assumptions of terminal growth rate on percentage of recoverable amount, percent	44.02%	99.82%
Trademark [member] | Vial y Vives-DSD [member]
Disclosure Of Sensitivity Analysis [line items]
Effect of ten percent decrease in assumptions of revenue growth rate on percentage of recoverable amount, percent	110.69%	27.40%
Effect of ten percent increase in assumptions of revenue growth rate on percentage of recoverable amount, percent	72.38%	55.71%
Effect of ten percent decrease in assumptions of discount rate on percentage of recoverable amount, percent	78.72%	29.54%
Effect of ten percent decrease in assumptions of terminal growth rate on percentage of recoverable amount, percent	88.07%	38.99%
Effect of ten percent increase in assumptions of discount rate on percentage of recoverable amount, percent	106.64%	55.99%
Effect of ten percent increase in assumptions of terminal growth rate on percentage of recoverable amount, percent	95.20%	44.26%

XML

Intangible Assets - Summary of Movement of Intangible Assets and That of Their Related Accumulated Amortization (Detail) S/ in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2019 PEN (S/)	Dec. 31, 2019 CLP ($)	Dec. 31, 2018 PEN (S/)	Dec. 31, 2017 PEN (S/)
Disclosure Of Goodwill [line items]
Intangible assets	S/ 847,095		S/ 940,070	S/ 960,286
Additions	137,624		100,681	117,290
Capitalization of interest expenses	3,527		3,361	26,015
Deconsolidation, net			(72,127)	(23,666)
Transfers from assets under Construction				169
Derecognition - net	(7,051)		(6,083)	(2,464)
Amortization	(105,278)		(112,072)	(86,557)
Impairment loss	(38,770)			(49,609)
Impairment reversal	20,676	$ 4,782
Translations adjustments	(4,508)		(6,735)	(1,394)
Intangible assets	853,315		847,095	940,070
Gross carrying amount [member]
Disclosure Of Goodwill [line items]
Intangible assets	1,741,820		1,777,200	1,707,958
Intangible assets	1,683,771		1,741,820	1,777,200
Accumulated depreciation, amortisation and impairment [member]
Disclosure Of Goodwill [line items]
Intangible assets	(894,725)		(837,130)	(747,672)
Intangible assets	(830,456)		(894,725)	(837,130)
Goodwill [member]
Disclosure Of Goodwill [line items]
Intangible assets	93,288		116,804	144,520
Deconsolidation, net			(20,086)	(3,524)
Derecognition - net	(930)
Impairment loss	(33,089)			(20,068)
Translations adjustments	(1,902)		(3,430)	(4,124)
Intangible assets	57,367		93,288	116,804
Goodwill [member] | Gross carrying amount [member]
Disclosure Of Goodwill [line items]
Intangible assets	174,031		197,547	205,195
Intangible assets	93,887		174,031	197,547
Goodwill [member] | Accumulated depreciation, amortisation and impairment [member]
Disclosure Of Goodwill [line items]
Intangible assets	(80,743)		(80,743)	(60,675)
Intangible assets	(36,520)		(80,743)	(80,743)
Trademarks [member]
Disclosure Of Goodwill [line items]
Intangible assets	52,441		65,100	93,666
Deconsolidation, net			(8,358)
Impairment loss				(29,541)
Impairment reversal	20,676
Translations adjustments	(2,471)		(4,301)	975
Reclasifications	49
Intangible assets	70,695		52,441	65,100
Trademarks [member] | Gross carrying amount [member]
Disclosure Of Goodwill [line items]
Intangible assets	97,097		110,486	109,511
Intangible assets	73,836		97,097	110,486
Trademarks [member] | Accumulated depreciation, amortisation and impairment [member]
Disclosure Of Goodwill [line items]
Intangible assets	(44,656)		(45,386)	(15,845)
Intangible assets	(3,141)		(44,656)	(45,386)
Concession rights [member]
Disclosure Of Goodwill [line items]
Intangible assets	482,040		528,227	517,760
Additions	26,645		23,803	38,156
Capitalization of interest expenses	2,725		3,361	26,015
Deconsolidation, net			(22,758)	(17,354)
Transfers from assets under Construction				(11,217)
Derecognition - net			(16)	(537)
Amortization	(49,049)		(50,776)	(24,609)
Impairment loss	(3,213)
Translations adjustments			199	13
Reclasifications	(15,198)
Intangible assets	443,950		482,040	528,227
Concession rights [member] | Gross carrying amount [member]
Disclosure Of Goodwill [line items]
Intangible assets	836,254		841,229	844,213
Intangible assets	710,290		836,254	841,229
Concession rights [member] | Accumulated depreciation, amortisation and impairment [member]
Disclosure Of Goodwill [line items]
Intangible assets	(354,214)		(313,002)	(326,453)
Intangible assets	(266,340)		(354,214)	(313,002)
Contractual relationships with clients [member]
Disclosure Of Goodwill [line items]
Intangible assets	17,057		34,265	32,811
Additions				5,274
Deconsolidation, net			(8,909)
Amortization	(3,682)		(7,996)	(4,189)
Translations adjustments	(114)		(303)	369
Reclasifications	(12,760)
Intangible assets	501		17,057	34,265
Contractual relationships with clients [member] | Gross carrying amount [member]
Disclosure Of Goodwill [line items]
Intangible assets	85,482		98,607	95,127
Intangible assets	72,810		85,482	98,607
Contractual relationships with clients [member] | Accumulated depreciation, amortisation and impairment [member]
Disclosure Of Goodwill [line items]
Intangible assets	(68,425)		(64,342)	(62,316)
Intangible assets	(72,309)		(68,425)	(64,342)
Software and development costs [member]
Disclosure Of Goodwill [line items]
Intangible assets	3,992		17,624	20,021
Additions	3,745		3,267	3,330
Deconsolidation, net			(10,153)	(21)
Transfers from assets under Construction	672		199	2,761
Derecognition - net	(2,015)		(1,941)	(1,572)
Amortization	(5,308)		(5,834)	(8,091)
Translations adjustments	(21)		830	1,196
Reclasifications	19,410
Intangible assets	20,475		3,992	17,624
Software and development costs [member] | Gross carrying amount [member]
Disclosure Of Goodwill [line items]
Intangible assets	16,177		59,913	60,607
Intangible assets	48,073		16,177	59,913
Software and development costs [member] | Accumulated depreciation, amortisation and impairment [member]
Disclosure Of Goodwill [line items]
Intangible assets	(12,185)		(42,289)	(40,586)
Intangible assets	(27,598)		(12,185)	(42,289)
Costs of development of wells [member]
Disclosure Of Goodwill [line items]
Intangible assets	139,221		116,733	108,722
Additions	102,022		68,544	49,698
Transfers from assets under Construction				5,008
Derecognition - net			(4,126)
Amortization	(43,552)		(41,930)	(46,695)
Reclasifications	(3,717)
Intangible assets	193,974		139,221	116,733
Costs of development of wells [member] | Gross carrying amount [member]
Disclosure Of Goodwill [line items]
Intangible assets	461,224		396,806	342,100
Intangible assets	558,530		461,224	396,806
Costs of development of wells [member] | Accumulated depreciation, amortisation and impairment [member]
Disclosure Of Goodwill [line items]
Intangible assets	(322,003)		(280,073)	(233,378)
Intangible assets	(364,556)		(322,003)	(280,073)
Land use right [member]
Disclosure Of Goodwill [line items]
Intangible assets	13,288		13,288	13,288
Impairment loss	(2,468)
Intangible assets	10,820		13,288	13,288
Land use right [member] | Gross carrying amount [member]
Disclosure Of Goodwill [line items]
Intangible assets	13,288		13,288	13,288
Intangible assets	13,288		13,288	13,288
Land use right [member] | Accumulated depreciation, amortisation and impairment [member]
Disclosure Of Goodwill [line items]
Intangible assets	(2,468)
Other assets [member]
Disclosure Of Goodwill [line items]
Intangible assets	45,768		48,029	29,498
Additions	5,212		5,067	20,832
Capitalization of interest expenses	802
Deconsolidation, net			(1,863)	(2,767)
Transfers from assets under Construction	(672)		(199)	3,617
Derecognition - net	(4,106)			(355)
Amortization	(3,687)		(5,536)	(2,973)
Translations adjustments			270	177
Reclasifications	12,216
Intangible assets	55,533		45,768	48,029
Other assets [member] | Gross carrying amount [member]
Disclosure Of Goodwill [line items]
Intangible assets	58,267		59,324	37,917
Intangible assets	113,057		58,267	59,324
Other assets [member] | Accumulated depreciation, amortisation and impairment [member]
Disclosure Of Goodwill [line items]
Intangible assets	(12,499)		(11,295)	(8,419)
Intangible assets	S/ (57,524)		S/ (12,499)	S/ (11,295)

XML

Deferred Income Tax - Additional Information (Detail) S/ in Thousands	Dec. 31, 2019 PEN (S/)
Deferred tax assets and liabilities [abstract]
Tax losses	S/ 517,316

XML

Discontinued Operations and Non-Current Asset Classified as Held For Sale - Summary of Non-current Assets and Liabilities Held for Sale (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Assets
Cash and cash equivalents	S/ 948,978	S/ 801,140	S/ 626,180
Trade accounts receivables, net	821,737	1,007,828
Inventories, net	552,573	514,047
Total assets	6,404,464	7,430,396
Liabilities
Borrowings	799,066	1,202,672
Deferred income tax liabilities	112,734	75,347
Total liabilities	4,528,379	4,940,465
Adexus S.A. [member] | Non-current assets held for sale [member]
Assets
Cash and cash equivalents	1,723	6,074
Trade accounts receivables, net	129,739	157,351
Inventories, net	2,828	3,999
Other assets, net	68,730	80,374
Total assets	203,020	247,798
Liabilities
Borrowings	91,529	71,810
Accounts payable	118,497	148,817
Deferred income tax liabilities		5,201
Total liabilities	210,026	225,828
Total net assets	S/ (7,006)	S/ 21,970

XML

Other Accounts Payable - Summary of Advances Details From Customers (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure Of Other Payables [line items]
Total	S/ 307,839	S/ 496,547
Current	270,714	301,868
Non-current	37,125	194,679
Advances Customers Consortiums [member]
Disclosure Of Other Payables [line items]
Total	115,250	154,660
Current	113,093	146,764
Non-current	2,157	7,896
Autoridad Autonoma del Sistema Electrico de Transporte [member]
Disclosure Of Other Payables [line items]
Total		164,218
Current		9,781
Non-current		154,437
Customer advances for real estate projects [member]
Disclosure Of Other Payables [line items]
Total	66,258	67,519
Current	66,258	67,519
Concentradora Norte - Quellaveco [member]
Disclosure Of Other Payables [line items]
Total	64,118
Current	44,932
Non-current	19,186
Special National Transportation Infrastructure Project [member]
Disclosure Of Other Payables [line items]
Total	42,030	69,943
Current	26,534	38,959
Non-current	15,496	30,984
Talara Refinery [member]
Disclosure Of Other Payables [line items]
Total		10,835
Current		10,835
Others [member]
Disclosure Of Other Payables [line items]
Total	20,183	29,372
Current	19,897	28,010
Non-current	S/ 286	S/ 1,362

XML

Interest in Other Entities (Tables)

12 Months Ended

Dec. 31, 2019

Investments accounted for using equity method [abstract]

Summary of Principal Direct and Indirect Subsidiaries Classified by Operating Segment

The following table shows the principal direct and indirect subsidiaries classified by operating segment (Note 7):

Name	Country	Economic activity
Engineering and Construction:
GyM S.A.	Peru, and Colombia	Civil construction, electro-mechanic assembly, buildings management and implementing housing development projects and other related services.
GyM Chile S.p.A.	Chile	Investment funds, investment companies and similar financial entities.
Vial y Vives - DSD S.A.	Chile	Construction engineering projects, civil construction and related technical consultancy, rental of agricultural machinery and equipment, forestry, construction and civil engineering without operator.
GMI S.A.	Peru, Mexico, and Bolivia	Advisory and consultancy services in engineering, carrying out studies and projects, managing projects and supervision of works.
Morelco S.A.S.	Colombia and Ecuador	Providing construction and assembly services, supply of equipment and materials, operation and maintenance and engineering services in the specialties of mechanics, instrumentation and civil works.
Infrastructure:
GMP S.A.	Peru	Oil and oil by-products extraction, operation and exploration services, as well as providing storage and fuel dispatch services.
Oiltanking Andina Services S.A.	Peru	Operation of the gas processing plant of Pisco - Camisea.
Transportadora de Gas Natural Comprimido Andino S.A.C.	Peru	Supply, process and market natural gas and its derivative products.
Concar S.A.	Peru	Highway and roads concessions operation and maintenance.
GyM Ferrovias S.A.	Peru	Concession for the operation of the public transportation system of Lima Metro (Metro de Lima Metropolitana).
Survial S.A.	Peru	Concession for constructing, operating and maintaining Section 1 of the “Southern Inter-oceanic” highway.
Norvial S.A.	Peru	Concession for restoring, operating and maintaining the “Ancon - Huacho - Pativilca” section of the Panamericana Norte road.
Concesion Canchaque S.A.C.	Peru	Concession for operating and maintaining of the Buenos Aires – Canchaque provincial road highway.
Concesionaria Via Expresa Sur S.A.	Peru	Concession for designing, constructing, operating and maintaining the Via Expresa - Paseo de la Republica in Lima.
Real estate:
VIVA GyM S.A.	Peru	Developing and managing real estate projects directly or together with other partners.
Parent company operation:
Adexus S.A.	Chile, Peru, Colombia and Ecuador	IT solutions services.
CAM Holding S.p.A.	Chile	Investment company.
Qualys S.A.	Peru	Human, economic and technological services to the Group’s companies.
Promotora Larcomar S.A.	Peru	Building a hotel complex on a plot of land located in the district of Miraflores.
Promotores Asociados de Inmobiliarias S.A.	Peru	Operating in the real-estate industry and engaged in the development and sale of office premises in Peru.
Negocios del Gas S.A.	Peru	Investment company for construction, operation, and maintenance of the pipeline system to transport natural gas and liquids.
Inversiones en Autopistas S.A.	Peru	Holding company of shares, participation or any other credit instrument or investment document.

Summary of Group's Subsidiaries and Related Interests

The following table shows the Group’s subsidiaries and related interest as of December 31, 2019:

	Percentage of common shares directly held by Parent (%)			Percentage of common shares held by Subsidiaries (%)			Percentage of common shares held by the Group (%)			Percentage of common shares held by non-controlling interests (%)
Engineering and Construction:
GyM S.A.		98.87	%		—			98.87	%		1.13	%
- Morelco S.A.S.		—			70.00	%		70.00	%		30.00	%
- GyM Chile S.p.A.		—			100.00	%		100.00	%		—
- Vial y Vives – DSD S.A.		—			94.49	%		94.49	%		5.51	%
GMI S.A.		89.41	%		—			89.41	%		10.59	%
- Ecología Tecnología Ambiental S.A.C.		—			100.00	%		100.00	%		—
- GM Ingenieria y Construcción de CV		—			99.00	%		99.00	%		1.00	%
- GM Ingenieria Bolivia S.R.L.		—			98.57	%		98.57	%		1.43	%
Infrastructure:
GMP S.A.		95.00	%		—			95.00	%		5.00	%
- Oiltanking Andina Services S.A.		—			50.00	%		50.00	%		50.00	%
- Transportadora de Gas Natural Comprimido Andino S.A.C.		—			99.93	%		99.93	%		0.07	%
Concar S.A.		100.00	%		—			100.00	%		—
GyM Ferrovias S.A.		75.00	%		—			75.00	%		25.00	%
Survial S.A.		100.00	%		—			100.00	%		—
Norvial S.A.		18.20	%		48.80	%		67.00	%		33.00	%
Concesión Canchaque S.A.		99.96	%		0.04	%		100.00	%		—
Concesionaria Vía Expresa Sur S.A.		99.98	%		0.02	%		100.00	%		—
Real Estate:
Viva GyM S.A.		56.22	%		43.32	%		99.54	%		0.46	%
Parent company operations:
Qualys S.A ( Previously Generadora Arabesco S.A.)		100.00	%		—			100.00	%		—
Promotora Larcomar S.A.		46.55	%		—			46.55	%		53.45	%
Negocios del Gas S.A.		99.99	%		0.01	%		100.00	%		—
Agenera S.A.		99.00	%		1.00	%		100.00	%		—
Inversiones en Autopistas S.A.		1.00	%		99.00	%		100.00	%		—
Cam Holding S.p.A.		100.00	%		—			100.00	%		—
Adexus S.A.		100.00	%		—			100.00	%		—

The following table shows the Group’s subsidiaries and related interest as of December 31, 2018:

	Percentage of common shares directly held by Parent (%)			Percentage of common shares held by Subsidiaries (%)			Percentage of common shares held by the Group (%)			Percentage of common shares held by non-controlling interests (%)
Engineering and Construction:
GyM S.A.		98.24	%		—			98.24	%		1.76	%
- Morelco S.A.S.		—			70.00	%		70.00	%		30.00	%
- GyM Chile S.p.A.		—			94.49	%		99.99	%		0.01	%
- Vial y Vives – DSD S.A.		—			94.49	%		94.49	%		5.51	%
GMI S.A.		89.41	%		—			89.41	%		10.59	%
- Ecología Tecnología Ambiental S.A.C.		—			—			99.99	%		0.01	%
- GM Ingenieria y Construcción de CV		—			—			99.00	%		1.00	%
- GM Ingenieria Bolivia S.R.L.		—			—			99.00	%		1.00	%
Infrastructure:
GMP S.A.		95.00	%		—			95.00	%		5.00	%
- Oiltanking Andina Services S.A.		—			50.00	%		50.00	%		50.00	%
- Transportadora de Gas Natural Comprimido Andino S.A.C.		—			99.93	%		99.93	%		0.07	%
Concar S.A.		99.99	%		—			99.99	%		0.01	%
GyM Ferrovias S.A.		75.00	%		—			75.00	%		25.00	%
Survial S.A.		99.99	%		—			99.99	%		0.01	%
Norvial S.A.		67.00	%		—			67.00	%		33.00	%
Concesión Canchaque S.A.		99.96	%		—			99.96	%		0.04	%
Concesionaria Vía Expresa Sur S.A.		99.98	%		0.02	%		100.00	%		—
Real Estate:
Viva GyM S.A.		63.44	%		36.10	%		99.54	%		0.46	%
Parent company operations:
Qualys S.A (Previously Generadora Arabesco S.A.)		99.00	%		—			99.00	%		1.00	%
Promotora Larcomar S.A.		46.55	%		—			46.55	%		53.45	%
Negocios del Gas S.A.		99.99	%		0.01	%		100.00	%		—
Agenera S.A.		99.00	%		1.00	%		100.00	%		—
Inversiones en Autopistas S.A.		100.00	%		—			—			—
Cam Holding S.p.A.		100.00	%		—			100.00	%		—
Adexus S.A.		99.99	%		0.01	%		100.00	%		—

Summary of Group's Subsidiaries Non-controlling Interests

As of December 31, the non-controlling interest is attributed to the following subsidiaries:

	2018		2019
Viva GyM S.A. and subsidiaries		168,612		168,839
GyM S.A. and subsidiaries		67,639		61,569
Norvial S.A.		65,918		63,031
GMP S.A.		23,424		24,413
GyM Ferrovias S.A.		55,986		77,564
Promotora Larcomar S.A.		13,121		3,058
Other		6,871		(199	)
		401,571		398,275

Summarized Financial Information of Subsidiaries With Material Non-controlling Interests

Summarized financial information of subsidiaries with material non-controlling interests

Set out below is the summarized financial information for each subsidiary that has non-controlling interests that are material to the Group.

Summarized statement of financial position

	Viva GyM S.A. and subsidiaries						GyM S.A. and subsidiaries						Norvial S.A.						GyM Ferrovías S.A.
	At December 31,						At December 31,						At December 31,						At December 31,
	2018			2019			2018			2019			2018			2019			2018			2019
Current:
Assets		720,976			591,402			1,262,588			1,232,486			109,778			84,889			534,148			449,180
Liabilities		(310,132	)		(263,592	)		(1,467,953	)		(1,491,747	)		(66,506	)		(53,715	)		(563,081	)		(93,879	)
Current net assets (liabilities)		410,844			327,810			(205,365	)		(259,261	)		43,272			31,174			(28,933	)		355,301
Non-current:
Assets		98,504			121,529			980,653			1,100,218			462,739			442,186			974,688			623,033
Liabilities		(37,154	)		(37,851	)		(413,026	)		(486,924	)		(306,261	)		(282,358	)		(716,946	)		(668,080	)
Non-current net assets (liabilities)		61,350			83,678			567,627			613,294			156,478			159,828			257,742			(45,047	)
Net assets		472,194			411,488			362,262			354,033			199,750			191,002			228,809			310,254

Summarized income statement    

	Viva GyM S.A. and subsidiaries						GyM S.A. and subsidiaries						Norvial S.A.						GyM Ferrovías S.A.
	For the year ended						For the year ended						For the year ended						For the year ended
	2018			2019			2018			2019			2018			2019			2018			2019
Revenue		630,130			264,401			1,704,998			2,279,786			163,117			272,679			577,993			397,853
Profit (loss) before income tax		226,945			30,729			(154,452	)		(116,081	)		21,104			24,067			116,822			121,079
Income tax		(69,166	)		(7,000	)		18,559			(30,843	)		(3,885	)		(6,815	)		(35,524	)		(39,634	)
Profit (loss) for the year		157,779			23,729			(135,893	)		(146,924	)		17,219			17,252			81,298			81,445
Discontinued operations		—			—			44,096			—			—			—			—			—
Other comprehensive income		—			—			(14,061	)		(7,436	)		—			—			—			—
Total comprehensive income for the year		157,779			23,729			(105,858	)		(154,360	)		17,219			17,252			81,298			81,445
Dividends paid to non-controlling interest (Note 35-d)		84,870			—			4,241			—			8,184			8,580			—			—

Summarized statement of cash flows

	Viva GyM S.A. and subsidiaries						GyM S.A. and subsidiaries						Norvial S.A.						GyM Ferrovías S.A.
	For the year ended						For the year ended						For the year ended						For the year ended
	2018			2019			2018			2019			2018			2019			2018			2019
Net cash provided from operating activities		259,992			28,791			148,754			(25,502	)		70,939			12,514			(161,318	)		379,882
Net cash (applied to) provided from investing activities		(8,460	)		(2,613	)		233,150			(20,173	)		(2	)		(33	)		1,928			2,845
Net cash (applied to) provided from financing activities		(255,979	)		(58,722	)		(388,836	)		209,514			(43,536	)		(46,045	)		189,495			(273,009	)
(Decrease) increase in cash and cash equivalents, net		(4,447	)		(32,544	)		(6,932	)		163,839			27,401			(33,564	)		30,105			109,718
Cash and cash equivalents at the beginning of the year		97,709			93,262			179,560			172,628			72,449			99,850			161,073			191,178
Cash and cash equivalents at the end of the year		93,262			60,718			172,628			336,467			99,850			66,286			191,178			300,896

Summary of Group's Public Services Concessions

The concessions held by the Group are as follows as of December 31, 2018 and 2019:

Name of Concession	Description	Estimated investment	Consideration	Ordinary shares held	Concession termination	Accounting model
Survial S.A.	This company operates and maintains a 750 km road from the San Juan de Marcona port to Urcos, Peru, which is connected to an interoceanic road. The road has five toll stations and three weigh stations.	US$99 million	Transaction secured by the Peruvian Government involving from annual payments for the maintenance and operation of the road, which is in charge of the Peruvian Ministry of Transport and Communications (MTC).	99.90%	2032	Financial asset
Canchaque S.A.C.	This company operates and periodically maintains a 78 km road which connects the towns of Buenos Aires and Canchaque, in Peru. The road has one toll station.	US$31 million (US$29 million in 2018)	Transaction secured by the Peruvian Government regardless the traffic volume. Revenue is secured by an annual minimum amount of US$0.3 million.	99.96%	2025	Financial asset
Concesionaria. La Chira S.A.	Designing, financing, constructing, operating and maintaining project called “Planta de Tratamiento de Aguas Residuales y Emisario Submarino La Chira”. The Project will treat approximately 25% of wastewaters in Lima.	S/250 million	Transaction secured by the Peruvian Government consisting of monthly and quarterly payments settled by Sedapal´s collection trust.	50.00%	2036	Financial asset
GyM Ferrovias S.A.	Concession for the operation of Line 1 of Lima Metro, Peru’s only urban railway system in Lima city, which includes (i) operation and maintenance of the existing trains (24 initial investment trains and 20 additional trains), (ii) operation and maintenance of the railway system (railway and infrastructure).	S/642 million	Transaction secured by the Peruvian Government involving a quarterly payment received from MTC based on km travelled per train.	75.00%	2041	Financial asset
Norvial S.A.	The Company operates and maintains the highway that connects Lima to the northwest of Peru. This 183 km road known as Red Vial 5 runs from the cities of Ancon to Pativilca and has three toll stations.	US$187 million (US$152 million in 2018)	From users (self-financed concession; revenue is derived from collection of tolls).	67.00%	2028	Intangible
Via Expresa Sur S.A.	The Company obtained the concession for designing, financing, building, operating and maintaining the infrastructure associated with the Via Expresa Sur Project. This project involves the second stage expansion of the Via Expresa - Paseo de la Republica,between Republica de Panama Avenue and and Panamericana highway.	US$197 million	The contract gives the right of collection from users; however the Peruvian Government shall pay the difference when the operating revenue obtained is below US$18 million during the first two years and US$19.7 million from the third year to the fifteenth year of the effective period of the financing, with a ceiling of US$10 million. In June 2017, the contract was suspended temporarily for one year by agreement between the Concessionaire and the grantor. The suspension was extended until June 2020.	99.98%	2053	Bifurcated

Summary of Group's Major Joint Operations

The table below lists the Group’s major Joint Operations.

	Percentage of interest
Joint operations	2017			2018			2019
Graña y Montero S.A.A.
- Concesionaria La Chira S.A.		50	%		50	%		50	%
GyM S.A.
- Consorcio CDEM		85	%		85	%		85	%
- Consorcio Huacho Pativilca		67	%		67	%		67	%
- Consorcio GyM – CONCIVILES		67	%		67	%		67	%
- Consorcio AMDP norte		50	%		50	%		—
- Consorcio Chicama - Ascope		50	%		50	%		50	%
- Consorcio Constructor Alto Cayma		50	%		50	%		50	%
- Consorcio Energía y Vapor		50	%		50	%		50	%
- Consorcio Ermitaño		50	%		50	%		50	%
- Consorcio GyM Sade Skanska		50	%		50	%		50	%
- Consorcio GYM-OSSA		—			—			50	%
- Consorcio GyM-Stracon		—			50	%		50	%
- Consorcio HV GyM		50	%		50	%		50	%
- Consorcio La Chira		50	%		50	%		50	%
- Consorcio Lima Actividades Comerciales Sur		50	%		50	%		50	%
- Consorcio Lima Actividades Sur		50	%		50	%		50	%
- Consorcio Menegua		50	%		50	%		50	%
- Consorcio para la Atención y Mantenimiento de Ductos		40	%		40	%		—
- Consorcio Rio Mantaro		50	%		50	%		50	%
- Consorcio Río Urubamba		50	%		50	%		50	%
- Consorcio TNT Vial y Vives - DSD Chile LTDA		50	%		50	%		50	%
- Constructora Incolur DSD Limitada		50	%		50	%		50	%
- Consorcio Alto Cayma		49	%		49	%		49	%
- Consorcio La Gloria		49	%		49	%		49	%
- Consorcio Norte Pachacutec		49	%		49	%		49	%
- Consorcio Italo Peruano		48	%		48	%		48	%
- Consorcio Vial Quinua		46	%		46	%		46	%
- Consorcio Constructor Ductos del Sur		29	%		29	%		29	%
- Consorcio Constructor Chavimochic		27	%		27	%		27	%
- Consorcio Vial ICAPAL		10	%		10	%		10	%
GMP S.A.
- Consorcio Terminales		50	%		50	%		50	%
- Terminales del Perú		50	%		50	%		50	%
CONCAR S.A.
- Consorcio Ancón-Pativilca		67	%		67	%		67	%
- Consorcio Peruano de Conservación		50	%		50	%		50	%
- Consorcio Manperán		67	%		67	%		67	%
- Consorcio Vial Sierra		50	%		100	%		50	%
- Consorcio Vial Ayahuaylas		99	%		99	%		99	%
- Consorcio Vial Sullana		99	%		99	%		99	%
- Consorcio Vial del Sur		99	%		99	%		99	%
Viva GyM S.A.
- Consorcio Panorama		35	%		—			—
GMI S.A.
- Consorcio Vial la Concordia		88	%		88	%		88	%
- Consorcio GMI- Haskoningdhv		—			70	%		70	%
- Consorcio Supervisor Ilo		55	%		55	%		55	%
- Consorcio Poyry-GMI		40	%		40	%		40	%
- Consorcio Internacional Supervisión Valle Sagrado		33	%		33	%		33	%
- Consorcio Ecotec - GMI - PIM		—			30	%		30	%
- Consorcio Ribereño Chinchaycamac		—			—			40	%

All the joint agreements listed above are operated in Peru, Chile and Colombia.

On November 2, 2019, the operation contract of Consorcio Terminales of the subsidiary GMP S.A., corresponding to the terminals of Pisco, Mollendo, Ilo, Cusco and Juliaca, was terminated, and the assets and operations were delivered to Petroperú. Currently, it is in the process of liquidating assets and liabilities.

The main activities of the joint operations correspond to:

Joint Operations in	Economic activity
Graña y Montero S.A.A.	Construction, operation and maintenance of La Chira wastewater treatment plant in the south of Lima. The project is aimed to solve Lima’s environmental problems caused by sewage discharged directly into the sea.
GyM S.A.	These joint operations were created exclusively for the development of construction contracts.
GMP S.A.	Consorcio Terminales and Terminales del Peru provide services for receiving, storing, shipping and transporting liquid hydrocarbons, such as gasoline, jet fuel, diesel fuel and residual among others.
CONCAR S.A.	Concar’s joint operations provides rehabilitation service, routine and periodic maintenance of the road, and road conservation and preservation services.
GMI S.A.	Engineering consulting services in, study and project execution, project management and Works supervision.

XML

Transactions with Non-controlling Interests - Additional Information (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2016	Nov. 30, 2016	May 31, 2016
Non-controlling interests [line items]
Acquisition of non-controlling interest	S/ 22,697	S/ 22,963
GyM S.A. [member] | Vial y Vives - DSD S.A [member]
Non-controlling interests [line items]
Percentage of capital acquired			1.49%	6.77%	5.43%
Payment for acquisition of non-controlling interest			S/ 3,800	S/ 25,700	S/ 21,600
Carrying amount of non controlling interests			S/ 3,900	S/ 17,900	S/ 13,900
Increase (Decrease) through de-recognition of non-controlling interest equity	(15,400)
Acquisition of non-controlling interest	S/ 22,700	S/ 23,000

XML

Trade Accounts Payable - Summary of Trade Accounts Payable (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure Of Trade Accounts Payable [abstract]
Invoices payable	S/ 352,287	S/ 591,619
Provision of contract costs	746,408	378,670
Notes payable	37,426	109,242
Trade accounts payable	S/ 1,136,121	S/ 1,079,531

XML

Transactions with Non-Controlling Interests

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Transactions with Non-Controlling Interests

35 TRANSACTIONS WITH NON-CONTROLLING INTERESTS

a) Acquisition of additional non-controlling interest

In May, November and December 2016, GyM Chile S.p.A. acquired 5.43%, 6.77%, and 1.49%, respectively of additional shares in Vial y Vives - DSD S.A. at a total purchase price of S/21.6 million, S/25.7 million and S/3.8 million, respectively. The carrying values of the non-controlling interest at the acquisition dates were S/13.9 million, S/17.9 million and S/3.9 million. The Group ceased to recognize the corresponding non-controlling interest, recording a decrease in equity attributable to the owners of the Company of S/15.4 million. At December 31, 2019, the outstanding balance was S/22.7 million (S/23 million in 2018) (Note 21).

b) Contributions (returns) from non-controlling shareholders

Corresponds to the contributions and returns made by the partners of the subsidiary Viva GyM S.A. for the realization of real estate projects. As of December 31, the balances include:

	2017			2018			2019
Viva GyM S.A.
Contributions received		8,654			3,399			152
Returns of contributions		(45,053	)		(87,856	)		(33,148	)
		(36,399	)		(84,457	)		(32,996	)
Plus (less):
Contributions from other subsidiaries		3,202			15,120			—
Increase (decrease) in equity of non controlling parties		(33,197	)		(69,337	)		(32,996	)

XML

Equity - Summary of Company's Corporte Structure (Detail)	12 Months Ended
	Dec. 31, 2019
Disclosure of classes of share capital [line items]
Number of shareholders	1,745
Total percentage of interest	100.00%
Upto one percent [member]
Disclosure of classes of share capital [line items]
Number of shareholders	1,725
Total percentage of interest	12.19%
From one point zero one percent to five percent [member]
Disclosure of classes of share capital [line items]
Number of shareholders	16
Total percentage of interest	30.98%
From five point zero one percent to ten percent [member]
Disclosure of classes of share capital [line items]
Number of shareholders	2
Total percentage of interest	18.34%
Over Ten Percent [member]
Disclosure of classes of share capital [line items]
Number of shareholders	2
Total percentage of interest	38.49%

XML

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Estimated Useful Life of Property, Plant and Equipment

The depreciation of other assets that do not qualify as “Major equipment” is calculated under the straight-line method to allocate their cost less their residual values over their estimated useful lives, as follows:

	Years
Buildings and facilities		Between 3 and 33
Machinery and equipment		Between 4 and 10
Vehicles		Between 2 and 10
Furniture and fixtures		Between 2 and 10
Other equipment		Between 2 and 10

Summary of Reclassified Discontinued Operations

a) Restatement of the Statement of Income as of December 31, 2017 (was restructured in the 2018 annual report, presented on April 30, 2019)

The consolidated statement of income for the year ended December 31, 2017 included the net gain on the sale of our former subsidiary GMD (S/218.3 million, equivalent to US$64.6 million) under the “Gain from the sale of investments” line item, rather than the “Profit from discontinued operations” line item, in accordance with IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, such amount has been restated in application of IFRS 5 paragraph 33 a).

	2017 Audited			Restatement GMD			Reclassification discontinued operations (*)			2017 Restated and Reclassified
Revenues		6,080,142			—			(2,066,129	)		4,014,013
Operating costs		(5,407,355	)		—			1,895,794			(3,511,561	)
Gross profit (loss)		672,787			—			(170,335	)		502,452
Administrative expenses		(429,181	)		—			106,727			(322,454	)
Other (expenses) income, net		(20,545	)		—			(12,324	)		(32,869	)
Gain (loss) from the sale of investments		274,363			(218,264	)		(21,554	)		34,545
Operating profit (loss)		497,424			(218,264	)		(97,486	)		181,674
Financial expenses		(185,445	)		—			34,668			(150,777	)
Financial income		15,407			—			(1,665	)		13,742
Share of the profit or loss in associates and joint ventures		1,327			—			(854	)		473
Profit (loss) before income tax		328,713			(218,264	)		(65,337	)		45,112
Income tax		(123,037	)		63,940			12,792			(46,305	)
Profit (loss) from continuing operations		205,676			(154,324	)		(52,545	)		(1,193	)
Profit from discontinued operations		3,562			154,324			52,545			210,431
Profit of the year		209,238									209,238
Earnings per share attributable to owners of the Company during the year		0.225									0.225
Earning (loss) per share from continuing operations attributable to owners of the Company during the year		0.220									(0.101	)

(*) Corresponds to financial result from discontinued operations, Stracon GyM S.A., CAM Servicios del Peru S.A., CAM Chile S.A. and Adexus S.A.

b) Reclassified discontinued operations as of December 31, 2018

As a result of the divestment process, the results of discontinued operations are reclassified as follows:

	2018 Audited			Reclassification discontinued operations			2018 Reclassified
Profit for the year		57,415			—			57,415
Other comprehensive income:
Items that will not be reclassified to profit or loss
Remeasurement of actuarial gains and losses, net of tax		16,589			—			16,589
Items that may be subsequently reclassified to profit or loss
Cash flow hedge, net of tax		119			—			119
Foreign currency translation adjustment, net of tax		5,733			—			5,733
Exchange difference from net investment in a foreign operation, net of tax		(8,147	)		—			(8,147	)
		(2,295	)		—			(2,295	)
Other comprehensive income for the year, net of tax		14,294			—			14,294
Total comprehensive income for the year		71,709			—			71,709
Comprehensive income attributable to:
Owners of the Company		(67,548	)		—			(67,548	)
Non-controlling interest		139,257			—			139,257
		71,709			—			71,709
Comprehensive income attributable to owners of the Company:
Continuing operations		(98,942	)		(32,342	)		(131,284	)
Discontinued operations		31,394			32,342			63,736
		(67,548	)		—			(67,548	)

XML

Other Provisions - Summary of Other Provisions (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure of other provisions [line items]
Provisions	S/ 328,435	S/ 109,608
Provisions, current	113,483	6,197
Provisions, not current	214,952	103,411
Legal contingencies [member]
Disclosure of other provisions [line items]
Provisions	278,319	84,728
Provisions, current	103,635	6,049
Provisions, not current	174,684	78,679
Contingent liabilities [member] | Acquisition of subsidiaries [member]
Disclosure of other provisions [line items]
Provisions		4,498
Provisions, not current		4,498
Provision for decommissioning, restoration and rehabilitation costs [member]
Disclosure of other provisions [line items]
Provisions	50,116	20,382
Provisions, current	9,848	148
Provisions, not current	S/ 40,268	S/ 20,234

XML

Borrowings - Summary of Carrying Amount and Fair Value of Borrowings (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure of detailed information about borrowings [line items]
Carrying amount	S/ 799,066	S/ 1,202,672
Carrying amount [member]
Disclosure of detailed information about borrowings [line items]
Carrying amount	799,066	1,202,672
Carrying amount [member] | Bank Overdrafts [member]
Disclosure of detailed information about borrowings [line items]
Carrying amount		119
Carrying amount [member] | Bank Loan [member]
Disclosure of detailed information about borrowings [line items]
Carrying amount	553,658	1,023,481
Carrying amount [member] | Finance Lease [member]
Disclosure of detailed information about borrowings [line items]
Carrying amount	22,980	33,488
Carrying amount [member] | Lease liability for right-of-use asset [member]
Disclosure of detailed information about borrowings [line items]
Carrying amount	80,216
Carrying amount [member] | Other financial liabilities [member]
Disclosure of detailed information about borrowings [line items]
Carrying amount	142,212	145,584
At fair value [member]
Disclosure of detailed information about borrowings [line items]
Carrying amount	834,057	1,336,987
At fair value [member] | Bank Overdrafts [member]
Disclosure of detailed information about borrowings [line items]
Carrying amount		119
At fair value [member] | Bank Loan [member]
Disclosure of detailed information about borrowings [line items]
Carrying amount	572,019	1,152,885
At fair value [member] | Finance Lease [member]
Disclosure of detailed information about borrowings [line items]
Carrying amount	23,027	38,399
At fair value [member] | Lease liability for right-of-use asset [member]
Disclosure of detailed information about borrowings [line items]
Carrying amount	96,799
At fair value [member] | Other financial liabilities [member]
Disclosure of detailed information about borrowings [line items]
Carrying amount	S/ 142,212	S/ 145,584

XML

Borrowings

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Borrowings

18 BORROWINGS

As of December 31, this item includes:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Bank overdrafts (Note 9)		119		—		119		—		—		—
Bank loans (a)		1,023,481		553,658		810,188		424,362		213,293		129,296
Finance leases (b)		33,488		22,980		13,514		9,749		19,974		13,231
Lease liability for right-of-use asset (c)		—		80,216		—		18,246		—		61,970
Other financial entities (d)		145,584		142,212		2,653		1,903		142,931		140,309
		1,202,672		799,066		826,474		454,260		376,198		344,806

a) Bank Loans

As of December 31, 2018, and 2019 includes bank loans in local and foreign currency for working capital. These obligations bear fixed interest rates ranging from 1.6% to 15.8% in 2018 and from 1.0% to 12.0% in 2019.

				Current						Non-current
	Interest	Date of		At December, 31						At December, 31
	rate	maturity		2018			2019			2018			2019
GyM S.A.	1.00% / 11.00%		2022		227,770			170,798	(iii)		—			26,401
Graña y Montero S.A.A.	9.10% / 10.10%		2022		206,836	(ii)		112,854	(iv)		125,547	(i)		—
Viva GyM S.A.	7.00% / 12.00%		2020		129,617			110,343			2,102			—
GMP S.A.	5.05% / 6.04%		2026		22,587			30,367			85,644			102,895
GyM Ferrovías S.A.	Libor USD 1M + 2%		2019		209,463			—			—			—
Concar S.A.	15.75%		2019		13,915			—			—			—
					810,188			424,362			213,293			129,296

i) Credit Suisse Syndicated Loan

In December 2015, the Company entered a US$200 million (equivalent to S/672 million) medium-term loan agreement with Credit Suisse AG, Cayman Islands Branch and Credit Suisse Securities (USA) LLC. The loan term is five years with quarterly installments starting on the 18th month. The loan bears interest at a rate of three months Libor plus 4.9% per year. The funds were used to finance the equity participation in GSP. On June 27, 2017, the Company renegotiated the terms of this loan to correct defaults related to the cancellation of the GSP concession. On June 26, 2019, the capital balance of the loan was paid in full (As of December 31, 2018, the principal balance of the loan amounts to US$37.5 million (equivalent to S/126.7 million).

ii) GSP Bridge Loan

As of December 31, 2016, the balance of bank loans included US$129 million (S/433 million) of the corporate guarantee issued by the Company to guarantee the bridge loan granted to GSP, However, on June 27, 2017, the Company reached a refinancing agreement with Natixis, BBVA, SMBC and MUFJ for US$78.7 million (S/256.3 million), this amount was used to repay the GSP bridge loan. The new loan matures in June 2020.

On June 28, 2019, the capital balance of the loan was paid in full, (As of December 31, 2018 the principal balance of the loan was US$63.5 million (equivalent to S/214.5 million).

iii) Financial Stability Framework Agreement

On July 31, 2017, the Company, and certain of our subsidiaries, GyM S.A., Construyendo Pais S.A., Vial y Vives — DSD and Concesionaria Vía Expresa Sur S.A., entered into a Financial Stability Framework Agreement (together with certain complementary contracts, the “Framework Agreement”) with the following financial entities: Scotiabank Perú S.A., Banco Internacional del Perú S.A.A., BBVA Banco Continental, Banco de Crédito del Perú, Citibank del Peru SA and Citibank N.A. The Framework Agreement aims to: (i) grant GyM S.A. a syndicated revolving line of credit for working capital for up to US$1.6 million and S/143.9 million, which may be increased by an additional US$14 million subject to certain conditions; (ii) grant GyM S.A. a line of credit of up to US$51.6 million and S/33.6 million; (iii) grant the Company, GyM S.A., Construyendo Pais S.A., Vial y Vives – DSD and Concesionaria Vía Expresa Sur S.A. a non-revolving line of credit to finance reimbursement obligations under performance bonds; (iv) grant a syndicated line of credit in favor of the Company and GyM S.A. for the issuance of performance bonds up to an amount of US$100 million (which may be increased by an additional US$50 million subject to compliance with certain conditions); and (v) to commit to maintain existing standby letters of credit issued at the request of GyM S.A. and the Company, as well as the request of Construyendo Pais S.A., Vial y Vives – DSD and Concesionaria Vía Expresa Sur S.A. In April of 2018, the Group repaid US$72.7 million (equivalent to S/245.8 million) of the facility with the proceeds of the sale of Stracon GyM S.A., and in July of 2018, an additional of US$15.4 million (equivalent to S/52.1 million). In August 2019, the Group paid the entire balance of Tranche B, equivalent to S/9.7 million and US$9.2 million. In September and October 2019, Tranche A was partially paid for S/.0.4 million and US$0.1 million; and S/0.5 million, respectively.

As of December 31, 2019, and the date of this annual report, there was US$44.2 million (equivalent to S/146.6 million).

GyM S.A. requested a waiver for a change in the Financial Stability Framework Agreement, in which at least 50% of the amount of Tranche A and up to 50% of the amount of Tranche A (project valuations) should be presented; the request was accepted by the lenders. As of December 31, 2019, and the date of this report, the value of client invoices and the value of project valuations is 65% and 134%, respectively, both percentages comply with the provisions of the approved waivers.

As of December 31,2019 and the date of this report, GyM S.A. is in compliance with the ratios established under the Financial Stability Framework Agreement and its waivers.

iv) CS Peru Infrastructure Holdings LLC Loan

In July 2019, the Company entered into a medium-term loan credit agreement for up to US$35 million with CS Peru Infrastructure Holdings LLC. The term of the loan is three years, with quarterly installments of principal starting on the 18th month. The loan accrued interest at the following rates per annum: (i) for the period from and including July 31, 2019 (“Closing Date”) to but excluding the date that is 6 months after the Closing Date, 9.10%; (ii) for the period from and including the date that is 6 months after the Closing Date to but excluding the date that is one year after the Closing Date, 9.35%; (iii) for the period from and including the date that is one year after the Closing Date to but excluding the date that is 30 months after the Closing Date, 9.60%; and (iv) for the period from and including the date that is 30 months after the Closing Date to the third anniversary of the Loan, 10.10%.

The proceeds were used for working capital in the Company, GyM S.A. and Adexus S.A. As of the date of this report, the principal amount outstanding under this loan is still US$35 million (equivalent to S/112.9 million).

On November 21, 2019, due to the filing of a preventive bankruptcy process by its Chilean subsidiary, Adexus S.A., the Company received a communication from CS Peru Infrastructure Holdings LLC informing of the occurrence of an event of default under the terms of the credit agreement, according to section 7.02(e) and 9.09 of the agreement. As a result, as of December 2019, the loan was classified as current liabilities. However, as of February 2020, the Company obtained the waiver, therefore as of the date of this report, the loan was reclassified to non-current liabilities.

b) Financial Leases

					Current				Non-current
	Interest		Date of		At December, 31				At December, 31
	rate		maturity		2018		2019		2018		2019
Viva GyM S.A.		7.79% / 9.04%		2023		3,488		4,297		8,582		7,399
GyM S.A.		1.98% / 9.07%		2023		4,523		3,395		9,314		5,678
GMP S.A.		4.02% / 6.28%		2022		4,034		1,511		1,522		154
Concar S.A.		4.30% / 5.05%		2020		1,469		546		556		—
						13,514		9,749		19,974		13,231

The minimum payments to be made according to their maturity and the present value of the leasing obligations are as follows:

	At December 31,
	2018			2019
Up to 1 year		15,151			10,826
From 1 to 5 years		21,583			16,813
		36,734			27,639
Future financial charges		(3,246	)		(4,659	)
Present value of the obligations for finance lease contracts		33,488			22,980

The present value of the finance lease agreements obligations are as follows:

	At December 31,
	2018		2019
Up to 1 year		13,514		9,749
From 1 year to 5 years		19,974		13,231
		33,488		22,980

c) Lease liability for right-of-use asset (Note 3.1)

						At December, 31
	Interest			Date of		2019
	rate			maturity		Current		Non-current
GMP S.A.		6.59% / 7.80	%		2023		10,584		10,261
Graña y Montero S.A.A.		7.88	%		2027		4,888		50,362
GyM S.A.		7.65	%		2022		1,592		541
Concar S.A.		5.55	%		2024		1,171		806
Other minors		6.31% / 10.00	%		2020		11		—
							18,246		61,970

The minimum payments to be made according to their maturity and the present value of the lease liability for right-of-use asset obligations are as follows:

	At December 31, 2019
Up to 1 year		24,966
From 1 to 5 years		69,955
Over 5 years		7,603
		102,524
Future financial charges		(22,308	)
Present value of the lease liability for right-of-use asset obligations		80,216

The present value of the lease liability for right-of-use asset obligations are as follows:

	At December 31, 2019
Up to 1 year		18,246
From 1 year to 5 years		54,595
Over 5 years		7,375
		80,216

d) Other financial entities

Monetization of Norvial dividends

On May 29, 2018, an investment agreement was signed between the Company and Inversiones Concesion Vial S.A.C. (“BCI Peru”) - with the intervention of Fondo de Inversion BCI NV (“Fondo BCI”) and BCI Management Administradora General de Fondos S.A. (“BCI Asset Management”) to monetize the future dividends on Norvial S.A. that our Company will receive. The transaction amount was US$42.3 million (equivalent to S/138 million) and was completed on June 11, 2018.

It has also been agreed that the Company will have call options on 48.8% of the economic rights of Norvial that BCI Peru will maintain through its participation in Inversiones en Autopistas S.A. Such options will be subject to certain conditions such as the maturity of different terms, recovery of the investment made with the funds of the BCI Fund (according to different economic estimates) and/or the occurrence of a change of control. As of December 31, 2019, the balance of the loan payable amounts to S/142.2 million (S/145.6 million as of December 31, 2018).

e) Fair value of debt

The book value and fair value of financial liabilities are as follows:

	Carrying amount				Fair value
	At December, 31				At December, 31
	2018		2019		2018		2019
Bank overdrafts		119		—		119		—
Bank loans		1,023,481		553,658		1,152,885		572,019
Finance leases		33,488		22,980		38,399		23,027
Lease liability for right-of-use asset		—		80,216		—		96,799
Other financial entities		145,584		142,212		145,584		142,212
		1,202,672		799,066		1,336,987		834,057

In 2019, fair values are based on discounted cash flows using debt rates between 2.9% and 11.0% (between 2.4% and 8.9% in 2018) and are within level 2 of the fair value hierarchy.

XML

Financial Instruments - Summary of Credit Quality of Financial Assets (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of financial assets [line items]
Cash and cash equivalents	S/ 948,978	S/ 801,140	S/ 626,180
Financial assets neither past due nor impaired [member]
Disclosure of financial assets [line items]
Cash and cash equivalents	941,991	796,197
Financial assets neither past due nor impaired [member] | Banco de Crdito del Per [member] | A + [member]
Disclosure of financial assets [line items]
Cash and cash equivalents	302,743	350,403
Financial assets neither past due nor impaired [member] | Banco Continental [member] | A + [member]
Disclosure of financial assets [line items]
Cash and cash equivalents	186,238	114,067
Financial assets neither past due nor impaired [member] | Citibank [member] | A- [member]
Disclosure of financial assets [line items]
Cash and cash equivalents	183,719	134,990
Financial assets neither past due nor impaired [member] | Banco Scotiabank [member] | A + [member]
Disclosure of financial assets [line items]
Cash and cash equivalents	64,101	73,039
Financial assets neither past due nor impaired [member] | Banco de la Nacion [member] | A- [member]
Disclosure of financial assets [line items]
Cash and cash equivalents	56,085	23,766
Financial assets neither past due nor impaired [member] | Credicorp capital colombia [member] | AAA [member]
Disclosure of financial assets [line items]
Cash and cash equivalents	44,338
Financial assets neither past due nor impaired [member] | Banco Interbank [member] | A- [member]
Disclosure of financial assets [line items]
Cash and cash equivalents	41,681	14,075
Financial assets neither past due nor impaired [member] | JP Morgan [member] | AAA [member]
Disclosure of financial assets [line items]
Cash and cash equivalents	17,853	257
Financial assets neither past due nor impaired [member] | Santander colombia [member] | AAA [member]
Disclosure of financial assets [line items]
Cash and cash equivalents	15,183
Financial assets neither past due nor impaired [member] | Banco Scotiabank - Chile [member] | A + [member]
Disclosure of financial assets [line items]
Cash and cash equivalents	9,801
Financial assets neither past due nor impaired [member] | Banco Santander-Peru [member] | A + [member]
Disclosure of financial assets [line items]
Cash and cash equivalents	114	12,221
Financial assets neither past due nor impaired [member] | Banco Bogota [member] | BB+ [member]
Disclosure of financial assets [line items]
Cash and cash equivalents	7,255	16,782
Financial assets neither past due nor impaired [member] | Banco Santander - Chile [member] | AAA [member]
Disclosure of financial assets [line items]
Cash and cash equivalents	5,817	3,325
Financial assets neither past due nor impaired [member] | Banco de Crdito e Inversiones-Chile [member] | AA + [member]
Disclosure of financial assets [line items]
Cash and cash equivalents		5,909
Financial assets neither past due nor impaired [member] | Others [member]
Disclosure of financial assets [line items]
Cash and cash equivalents	7,017	8,312
Financial assets neither past due nor impaired [member] | Fondo de Inversion Alianza [member] | AA + [member]
Disclosure of financial assets [line items]
Cash and cash equivalents	S/ 46	S/ 39,051

XML

Cash and Cash Equivalents - Summary of detailed about cash and cash equivalents (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure of cash and cash equivalents [line items]
Escrow account	S/ 552,439	S/ 334,579
Reserve funds issued bonds [member]
Disclosure of cash and cash equivalents [line items]
Escrow account	199,192	146,590
Real estate projects [member]
Disclosure of cash and cash equivalents [line items]
Escrow account	31,794	38,961
Engineering and construction projects Colombia [member]
Disclosure of cash and cash equivalents [line items]
Escrow account	44,457	39,084
Engineering and construction projects Peru [member]
Disclosure of cash and cash equivalents [line items]
Escrow account	192,069	47,538
Infrastructure projects [member]
Disclosure of cash and cash equivalents [line items]
Escrow account	S/ 84,927	S/ 62,406

XML

Inventories

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Inventories

14 INVENTORIES

At December 31, this account comprises:

	2018			2019
Land		230,689			183,218
Work in progress - Real estate		135,376			158,010
Finished properties		76,027			86,190
Construction materials		27,852			59,879
Merchandise and supplies		53,310			74,959
		523,254			562,256
Impairment of inventories		(9,207	)		(9,683	)
		514,047			552,573

Land

Land comprises properties, net of impairment and includes properties for the development of the following projects of the subsidiary GyM Viva S.A. As of December 31, 2019, the land impairment provision equals S/5.2 million (S/9.2 million in 2018):

	2018		2019
Lurin (a)		72,080		71,902
San Isidro (b)		49,664		51,285
San Miguel (c)		28,811		—
Nuevo Chimbote (d)		17,262		17,457
Barranco (e)		13,585		14,202
Huancayo (f)		8,282		—
Piura		8,105		11,805
Carabayllo III		14,941		16,567
Others (g)		8,752		—
		221,482		183,218

(a) Plot of land of 107 hectares that corresponds to Inmobiliaria Almonte S.A.C. and a land 210 hectares that corresponds to Inmobiliaria Almonte 2 S.A.C.; both lands located in the district of Lurin, province of Lima, destined for the purposes of industrial development and public housing.

(b) Land located on David Samanez Ocampo street N° 140 in San Isidro district where a 15-story building with 24 apartments and 124 parking lots will be built.

(c) Regarding the Parques del Mar project located in San Miguel, a traditional multi-family housing condominium with 248 apartments and 185 parking lots is developed. In December 2019, the construction of the condominium began, which is why it is shown in products in process.

(d) Land located in Chimbote of 11.5 hectares for the development of a real estate social housing project.

(e) Land located in Paul Harris St. N°332 and N°336 in Barranco district, for the development of a residential building project.

(f) With respect to the project located in the province of Huancayo, in December 2019, the deliveries of land from the second stage began; That is why the stock of them is shown in finished products.

(g) With respect to others, it includes the Strip project that delivered commercial premises and was transferred from land to finished products for S/22.9 million, as of December 2019 there is a stock in finished products of S/6.3 million.

Land properties correspond to assets maintained since 2015, for which construction has not yet begun. The increase in costs of the year is mainly due to engineering, license paperwork, and other smaller costs. Construction in these land properties is expected to begin in the second half of 2020.

Real estate - work in progress

At December 31, real state work in progress comprises the following projects:

	2018		2019
Los Parques de Comas		69,743		77,757
Los Parques del Callao		46,697		35,549
Los Parques del Mar		—		32,183
Los Parques de Piura		11,066		5,658
Inmobiliaria Pezet 417 S.A.C.		3,563		4,091
Others		4,307		2,772
		135,376		158,010

During 2019 the Group has capitalized financing costs of these construction projects (Note 2.19) amounting to S/3.7 million at annual interest rates between 7% and 12% (S/7.9 million in 2018 at interest rates between 7% and 12%).

Finished properties

At December 31, the balance of finished properties consists of the following investment properties:

	2018		2019
Los Parques de Comas		18,785		37,605
Huancayo		15,546		19,672
Los Parques de Callao		389		10,914
Klimt		5,911		5,978
El Rancho		19,314		2,347
Los Parques de San Martĺn de Porres		4,029		903
Rivera Navarrete		4,053		131
Los Parques de Carabayllo		942		168
Los Parques de Villa El Salvador II		4,277		117
Others		2,781		3,900
		76,027		81,735

As of December 31, 2019, the balance of finished properties is net of an impairment of S/4.5 million.

Construction materials

As of December 31, 2019, the construction materials correspond mainly to projects of the subsidiary GyM S.A. for S/57.4 million (GyM S.A. for S/27.8 million as of December 31, 2018).

XML

Other Provisions

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Provisions

22 OTHER PROVISIONS

At December 31, this item includes:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Legal contingencies		84,728		278,319		6,049		103,635		78,679		174,684
Contingent liabilities from the acquisition of subsidiaries		4,498		—		—		—		4,498		—
Provision for well closure (Note 5.1 d)		20,382		50,116		148		9,848		20,234		40,268
		109,608		328,435		6,197		113,483		103,411		214,952

Additions for legal claims correspond to:

i) Provision for civil reparation

As of December 31, 2019, the Group updated the present value of the estimated provision amounting to S/154 million (S/73.5 million as of December 31, 2018), corresponding to the legal contingency estimated by the Management for exposure of the Company and its subsidiaries to the probable imposition of an obligation to compensate the government in relation to their participation as minority partners in certain entities that developed infrastructure projects in Peru with companies belonging to the Odebrecht group and in projects associated with the Construction Club.

ii) Class Action

Two class action lawsuits have been filed against the company and certain of our former officials in before the United States Court for the Eastern District of New York during the first quarter of 2017 that were later consolidated into a single claim. The plaintiffs allege that during the class period the Company obtained equity investments from investors based on false and misleading statements that were made in breach of the Securities Act and that caused material losses to such investors In particular, it is complaint alleges that the defendant did not disclose, among other things, that: a) the Company knew that its partner Odebrecht was involved in illegal activities; and that, b) the Company profited from such activities in violation of its own corporate governance rules.

As of the date of this report, the Company has entered into term sheet with the plaintiffs’ counsel, whereby the parties undertake to ensure the termination of the class action, through the negotiation, conclusion and filing of the final settlement agreement before court. The amount stipulated for the termination of the class action equals to US $ 20 million. As of December 31, 2019, the Company has made a provision of S/49.8 million (US $ 15 million) and the surplus of US $ 5 million will be covered by a professional liability policy pursuant to settlement agreement entered with the insurer.

iii) Other provisions

Other provisions correspond mainly to claims received from clients for S/46 million in the subsidiary GyM S.A.

The gross movement of other provisions is as follows:

Other provisions	Legal contingencies			Contingent liabilities resulting from acquisitions			Provision for well closure			Total
At January 1, 2017		15,732			8,125			17,216			41,073
Additions		9,510			—			—			9,510
Reversals of provisions		(235	)		(809	)		(412	)		(1,456	)
Payments		(1,680	)		—			—			(1,680	)
Translation adjustments		37			(67	)		—			(30	)
At December 31, 2017		23,364			7,249			16,804			47,417
Additions		75,369			—			3,578			78,947
Reversals of provisions		(4,875	)		(1,343	)		—			(6,218	)
Deconsolidation of subsidiaries		(2,340	)		—			—			(2,340	)
Reclasification liabilities classified as held for sale		—			(1,093	)		—			(1,093	)
Payments		(6,615	)		—			—			(6,615	)
Translation adjustments		(175	)		(315	)		—			(490	)
At December 31, 2018		84,728			4,498			20,382			109,608
Additions		197,721			—			30,998			228,719
Reversals of provisions		(3,122	)		(4,349	)		—			(7,471	)
Payments		(914	)		—			(1,264	)		(2,178	)
Translation adjustments		(94	)		(149	)		—			(243	)
At December 31, 2019		278,319			—			50,116			328,435

XML

Trade Accounts Receivables, Net - Additional Information (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure Of Accounts Receivable [line items]
Discount rate under discounted cash flows method	7.70%	7.33%
Financial assets impaired [member]
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable	S/ 1,000	S/ 3,100
At fair value [member]
Disclosure Of Accounts Receivable [line items]
Non current receivables	S/ 1,013,000	S/ 1,060,000

XML

Inventories - Schedule of Inventories of Land (Parenthetical) (Detail)	12 Months Ended
	Dec. 31, 2019 ha Apartment ParkingSpaces
Lurin [member] | Inmobiliaria Almonte SAC [member]
Disclosure of inventories [line items]
Area of land for development of social housing project	107
Lurin [member] | Inmobiliaria Almonte 2 Sac [Member]
Disclosure of inventories [line items]
Area of land for development of social housing project	210
San Miguel [member]
Disclosure of inventories [line items]
Number of apartments in building | Apartment	248
Number of parking lots | ParkingSpaces	185
Nuevo Chimbote [member]
Disclosure of inventories [line items]
Area of land for development of social housing project	11.5
David Samanez Ocampo [member]
Disclosure of inventories [line items]
Number of apartments in building | Apartment	24
Number of parking spaces | ParkingSpaces	124

XML

Other Accounts Receivable - Schedule Of Guarantee Deposits (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure Of Detailed Information About Guarantee Deposits [Line Items]
Guarantee Deposits, Current	S/ 13,201	S/ 15,137
Gross carrying amount [member]
Disclosure Of Detailed Information About Guarantee Deposits [Line Items]
Guarantee Deposits, Current	98,046	167,769
Guarantee Deposits Current, Non current	83,354	12,241
Guarantee Deposits	181,400	180,010
Talara Refinery [member]
Disclosure Of Detailed Information About Guarantee Deposits [Line Items]
Guarantee Deposits, Current	308	72,992
Guarantee Deposits Current, Non current	55,259
Guarantee Deposits	55,567	72,992
Retention Toquepala [Member]
Disclosure Of Detailed Information About Guarantee Deposits [Line Items]
Guarantee Deposits, Current	19,630	15,633
Guarantee Deposits	19,630	15,633
Retention Minera Teck [Member]
Disclosure Of Detailed Information About Guarantee Deposits [Line Items]
Guarantee Deposits, Current	16,075	2,848
Guarantee Deposits	16,075	2,848
Retention Quellaveco [Member]
Disclosure Of Detailed Information About Guarantee Deposits [Line Items]
Guarantee Deposits, Current	15,926	2,996
Guarantee Deposits	15,926	2,996
Joint Operations Retention [Member]
Disclosure Of Detailed Information About Guarantee Deposits [Line Items]
Guarantee Deposits, Current	15,654	43,268
Guarantee Deposits Current, Non current	13,921
Guarantee Deposits	29,575	43,268
Retention Morelco [Member]
Disclosure Of Detailed Information About Guarantee Deposits [Line Items]
Guarantee Deposits, Current	15,261	16,282
Guarantee Deposits	15,261	16,282
Retention Marcobre [Member]
Disclosure Of Detailed Information About Guarantee Deposits [Line Items]
Guarantee Deposits, Current	5,052
Guarantee Deposits	5,052
SBLC guarantees - Sale of CAM Chile S.p.A. [Member]
Disclosure Of Detailed Information About Guarantee Deposits [Line Items]
Guarantee Deposits, Current	3,576	7,980
Guarantee Deposits Current, Non current	11,150	12,241
Guarantee Deposits	14,726	20,221
Others [member]
Disclosure Of Detailed Information About Guarantee Deposits [Line Items]
Guarantee Deposits, Current	6,564	5,770
Guarantee Deposits Current, Non current	3,024
Guarantee Deposits	S/ 9,588	S/ 5,770

XML

Interests in Other Entities - Additional Information (Detail) - PEN (S/) S/ in Millions	1 Months Ended
	Dec. 31, 2019	Jun. 30, 2018
Adexus S.A. [member]
Disclosure of subsidiaries [line items]
Increase in proportion of ownership interest in subsidiary		100.00%
Viva GyM S.A. [member]
Disclosure of subsidiaries [line items]
Supplementary premium capitalize	S/ 65.3
Returns of contributions	S/ 82.3
Percentage of common shares directly held by Parent (%)	56.20%
Percentage of common shares held by Subsidiaries (%)	43.30%
Capital increase for monetary contributions	S/ 146.1
Percentage of common shares held by the Group (%)	98.90%
Viva GyM S.A. [member] | Previously stated [member]
Disclosure of subsidiaries [line items]
Percentage of common shares directly held by Parent (%)	63.40%
Percentage of common shares held by Subsidiaries (%)	36.10%
Percentage of common shares held by the Group (%)	98.20%

XML

Property, Plant And Equipment, Net And Right-Of-Use Assets - Summary of Net Carrying Amount of Machinery and Equipment, Vehicles and Furniture and Fixtures Acquired Under Finance Lease Agreements (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about property, plant and equipment [line items]
Accumulated depreciation	S/ (72,038)	S/ (123,100)	S/ (197,484)
Net carrying amount	443,870	470,554	865,735	S/ 1,113,599
Finance Lease [member]
Disclosure of detailed information about property, plant and equipment [line items]
Cost of acquisition	67,310	86,881	650,301
Accumulated depreciation	(44,671)	(38,026)	(351,447)
Net carrying amount	S/ 22,639	S/ 48,855	S/ 298,854

XML

Deferred Income Tax (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Deferred Income Tax

Deferred income tax is classified by its estimated reversal term as follows:

	At December 31,
	2018			2019
Deferred income tax asset:
Reversal expected in the following twelve months		48,889			37,927
Reversal expected after twelve months		376,547			202,992
Total deferred tax asset		425,436			240,919
Deferred income tax liability:
Reversal expected in the following twelve months		(9,067	)		(19,791	)
Reversal expected after twelve months		(66,280	)		(92,943	)
Total deferred tax liability		(75,347	)		(112,734	)
Deferred income tax asset, net		350,089			128,185

Summary of Movement of Deferred Income Tax

The gross movement of the deferred income tax item is as follows:

	At December 31,
	2017			2018			2019
Opening balance		353,839			364,225			350,089
Debit (credit) to income statement (Note 29)		42,599			25,118			(206,273	)
Adjustment for changes in rates of income tax		1,951			(1,524	)		(622	)
Sale of a subsidiary		(12,160	)		(40,460	)		—
IFRIC 23 adoption		—			—			(986	)
Debit (credit) to equity		(16,804	)		(95	)		(3	)
Other movements		(5,200	)		2,825			(14,020	)
Final balance		364,225			350,089			128,185

Summary of Movements of Deferred Tax Assets and Liabilities

The movement in deferred tax assets and liabilities in the year, without considering the offsetting of balances, is as follows:

Deferred income tax liabilities	Difference in depreciation rates			Deferred income		Work in process			Tax receivable		Borrowing costs capitalized			Purchase price allocation			Others			Total
At January 1, 2017		61,750			—		8,242			28,867		21,418			27,118			13,164			160,559
(Charge) credit to P&L		104,101			—		(5,712	)		3,322		(1,473	)		(11,780	)		(3,724	)		84,734
Sale of subsidiary		—			—		—			—		—			—			(83	)		(83	)
At December 31, 2017		165,851			—		2,530			32,189		19,945			15,338			9,357			245,210
(Charge) credit to P&L		(74,679	)		13,574		2,926			689		(4,229	)		(11,699	)		7,828			(65,590	)
Sale of subsidiary		(16,189	)		—		—			—		—			(5,201	)		(3,377	)		(24,767	)
At December 31, 2018		74,983			13,574		5,456			32,878		15,716			(1,562	)		13,808			154,853
(Charge) credit to P&L		9,937			10,571		33,403			3,312		(780	)		11,385			18,821			86,649
At December 31, 2019		84,920			24,145		38,859			36,190		14,936			9,823			32,629			241,502

Deferred income tax assets	Provisions			Accelerated tax depreciation			Tax losses			Work in process			Accrual for unpaid vacations			Investments in subsidiaries			Impairment			Tax Goodwill			Others			Total
At January 1, 2017		105,679			16,381			153,083			17,614			12,972			608			172,052			20,525			15,484			514,398
Charge (credit) to P&L		(12,614	)		79,637			(8,555	)		21,873			2,166			118			28,593			(112	)		18,358			129,464
Charge (credit) to equity		(8,882	)		—			—			—			—			—			(7,493	)		—			(347	)		(16,722	)
Reclassification		(30,901	)		—			—			—			—			(726	)		31,627			—			—			—
Sale of subsidiary		(683	)		(9,367	)		(438	)		—			(1,697	)		—			—			—			(236	)		(12,421	)
Others		(160	)		—			(1	)		—			(1	)		—			1			—			(5,123	)		(5,284	)
At December 31, 2017		52,439			86,651			144,089			39,487			13,440			—			224,780			20,413			28,136			609,435
Charge (credit) to P&L		702			(83,561	)		25,733			(5,482	)		1,784			—			35,289			(2,365	)		(14,096	)		(41,996	)
Charge (credit) to equity		—			—			—			—			—			—			—			—			(95	)		(95	)
Sale of subsidiary		(14,775	)		(2,169	)		(33,512	)		—			(6,215	)		—			(6,462	)		—			(944	)		(64,077	)
Others		—			—			—			—			—			—			—			—			1,675			1,675
At December 31, 2018		38,366			921			136,310			34,005			9,009			—			253,607			18,048			14,676			504,942
Charge (credit) to P&L		804			7,512			14,343			11,715			1,842			—			(205,265	)		(4,526	)		53,329			(120,246	)
Charge (credit) to equity		—			—			—			—			—			—			—			—			(3	)		(3	)
IFRIC 23 adoption		—			—			(986	)		—			—			—			—			—			—			(986	)
Others		—			—			—			—			—			—			—			—			(14,020	)		(14,020	)
At December 31, 2019		39,170			8,433			149,667			45,720			10,851			—			48,342			13,522			53,982			369,687

Summary Of Tax Loss Carry forward

As of December 31, 2019, the total tax loss amounts to S/517.3 million and is composed as follows:

	Tax		Tax loss aplication		Application						Statute of
	loss		method		2020		2021		Forward		limitations
GyM S.A.		328,946		B		23,985		13,270		291,691
Vial y Vives-DSD S.A.		115,027		N/A		71,010		6,018		37,999
Viva GyM S.A.		21,530		A		16,917		4,613		—		2022
Graña y Montero S.A.A.		17,875		A		—		—		17,875		2022
TGNCA S.A.C.		15,989		B		—		—		15,989
Morelco S.A.S.		5,650		N/A		5,650		—		—
GMP S.A.		4,869		A		4,869		—		—		2021
GyM Chile S.p.A.		4,052		N/A		—		—		4,052
Survial S.A.		2,053		A		1,437		616		—		2023
Incolur DSD		1,278		N/A		—		—		1,278
Others		47				47		—		—
		517,316				123,915		24,517		368,884

XML

Standards, Amendments and Interpretation Adopted in 2019

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Standards, Amendments and Interpretation Adopted in 2019

3 STANDARDS, AMENDMENTS, AND INTERPRETATION ADOPTED IN 2019

3.1 Current standards, amendments, and interpretations adopted

The following current standards, amendments to the policies and interpretations were adopted by the Group on January 1, 2019.

a) IFRS 16 “Leases”

This standard replaces the accounting treatment of leases under IAS 17 “Leases” and IFRIC 4 “Determination of whether an agreement contains a lease” and other related interpretations.

IFRS 16 was implemented as of January 1, 2019 and the Group applied the modified retrospective approach, so that comparative information has not been restructured, recognizing on the date of initial application an amount of asset per right of use equal to lease liability; adjusted for the amount of any payment for early or accrued lease, related to leases recognized in the consolidated statement of financial position.

IFRS 16 eliminates the current difference between operating and finance leases and requires the recognition of an asset (the right to use the leased asset) and a financial liability for the payment of income, this for virtually all lease agreements. There is an optional exemption for short-term and low-value leases.

The income statement will also be affected because the total expenditure is normally higher in the first years of the lease and lower in recent years. In addition, operating expenses will be replaced by interest and depreciation expenses, so key metrics such as EBITDA will change.

The accounting by the lessors will not change significantly.

Impact on the financial statements

In the adoption of IFRS 16, the Group recognized liabilities related to leases that have been previously classified as operating leases under IAS 17. These liabilities have been measured based on the present value of the remaining future payments, discounted using a rate of incremental interest as of January 1, 2019 (7.3% average interest rate).

As a result of the effect of the transition of IFRS 16, right-of-use assets and liabilities for S/97.7 million were recognized as of January 1, 2019 (representing 1.33% and 2.15% of total assets and liabilities, respectively). As part of the initial application of IFRS 16, the Company used the modified retrospective method, therefore, the financial statements for previous years were not modified.

At December 31, 2019, the effect of IFRS 16 in the Group’s financial statements is detailed as follows:

Impact on assets	At December 31, 2019
Right-of-use
Right-of-use buildings		59,599
Right-of-use vehicles		20,211
Right-of-use machinery		17,896
Impact of implementation 2019		97,706
Adjustments on contract fees		4,039
Total right-of-use assets		101,745
Cumulative depreciation		(22,958	)
Foreign currency translation effect		26
Impact on assets (Note 16.2)		78,813

At the end of 2019, the Group’s companies with the most representative balances were GMP S.A. (S/24 million) and Graña y Montero S.A.A. (S/54 million).

Impact on liabilities	At December 31, 2019
Impact of implementation 2019		97,706
Adjustments on contract fees		4,039
Addition of liabilities for right-of-use		101,745
Accrued interest		5,617
Amortization		(20,326	)
Interest paid		(5,368	)
Foreign currency translation effect		(11	)
Exchange difference		(1,441	)
Impact on liabilities		80,216
Short-term liabilities for right-of-use		18,246
Long-term liabilities for right-of-use		61,970
Impact on liabilities (Note 18)		80,216

b) IFRIC 23 “Uncertainty over income tax treatments”

IFRIC 23 Uncertainty regarding income tax treatments (hereinafter “IFRIC 23”), describe the assessment you must comply with when there is a tax treatment for which you are uncertain about whether or not to be accepted by the tax administration, according to the interpretation of tax legislation. If the company identifies uncertain tax treatments, the effect of the uncertainty must be identified through a provision of the current income tax or the deferred income tax, whichever is applicable.

The Group adopted IFRIC 23 from January 1, 2019. This rule regulates how to determine the accounting record of a tax position when there is uncertainty about income tax treatments.

The interpretation requires the Group to determine whether uncertain tax positions are assessed separately or in groups; and assess whether a tax authority is likely to accept uncertain tax treatment to be used by an entity in its income tax returns.

If tax authority accepts, the Group must determine its tax position in a manner consistent with the tax treatment used or intended to be used in its tax returns. If not, the Group must reflect the effect of uncertainty in determining its tax position using the most probable amount method or the expected value method.

Uncertain tax positions have been evaluated separately in each Group company and have been identified as the best method the most likely amount. Based on the foregoing, the Group has recognized an income tax accrual of S/0.5 million and a decrease in deferred income tax assets of S/1 million, affecting the retained earnings on S/1.5 million. Due to the aforementioned tax uncertainty, there is a possibility that, at the end of the processes of the years open to the audit, the final result may differ from what was originally assessed.

3.2 Standards and amendments issued to be adopted at a later date

a) International Financial Reporting Standard 17 (IFRS 17 “Insurance Contracts”), effective as of January 1, 2021. It has no impact on the Group.

b) Amendments to the Rules

The following amendments to IFRS have been issued and are applicable to the Group for its annual periods as of January 1, 2020:

• Modification to references to the Conceptual Framework of International Financial Reporting Standards (IFRS), effective as of January 1, 2020.

• Definition of a Business (Amendments to IFRS 3 “Business Combinations”), effective as of January 1, 2020.

• Definition of Materiality (Amendments to IAS 1 “Presentation of Financial Statements” and IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”), effective as of January 1, 2020.

• Sale or contribution of assets between an investor and its associate or joint arrangement, with no defined effective date, but its application is optionally allowed.

The Group has not adopted the amendments and modifications in advance and is not expected to have an impact on current or future reporting periods and foreseeable future transactions.

XML

Trade Accounts Payable (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Trade Accounts Payable

As of December 31, this item includes:

	2018		2019
Invoices payable (a)		591,619		352,287
Provision of contract costs (b)		378,670		746,408
Notes payable		109,242		37,426
		1,079,531		1,136,121

Disclosure Of Detailed Information About Invoices Payable

(a) Invoices payable are obligations accredited with formal documents. The following are the invoices payable according to main projects:

	2018		2019
Infrastructure
Linea 1 - Metro de Lima		93,463		15,125
Oil services		49,254		46,932
Operation and maintenance - Roads		60,334		16,131
		203,051		78,188
Engineering and Construction
Works and Consortiums		128,159		64,571
Talara Refinery		101,103		59,740
Engineering and Construction Works VYV - DSD Chile Ltda.		26,184		26,368
Civil Works, Assembly and Electromechanics - Toquepala		23,957		10,325
North Concentrator Plant - Quellaveco		7,564		26,589
Engineering and Construction Works - Morelco S.A.S.		19,504		8,141
Generating Plant Machu Picchu		7,789		6,575
Project Mina Gold Fields La Cima S.A.		5,060		5,302
Civil works, assembly and electromechanics - Acero Arequipa		3,062		5,421
Others		5,319		15,091
		327,701		228,123
Real Estate		18,365		26,072
Parent Company Operation		42,502		19,904
		591,619		352,287

Disclosure Of Detailed Information About Provision Of Contract Costs

	2018		2019
Infrastructure
Linea 1 - Metro de Lima		11,189		13,383
Oil services		—		20,512
Operation and maintenance - Roads		1,020		18,763
		12,209		52,658
Engineering and Construction
Talara Refinery		115,870		418,540
Works and Consortiums		105,681		68,239
Engineering and Construction Works VYV - DSD		51,412		68,140
Engineering and Construction Works - Morelco SAS		27,570		34,804
North Concentrator Plant - Quellaveco		10,030		24,185
Mina Project of Gold Fields La Cima S.A.		8,520		15,050
Civil Works, Assembly and Electromechanics - Acero Arequipa		4,932		17,382
Civil Works, Assembly and Electromechanics - Toquepala		5,283		5,055
Generating Plant Machu Picchu		2,376		4,633
Others		8,513		23,063
		340,187		679,091
Real Estate		12,808		13,573
Parent Company Operation		13,466		1,086
		378,670		746,408

XML

Critical Accounting Estimates and Judgments - Additional Information (Detail) S/ in Millions	12 Months Ended
	Dec. 31, 2019 PEN (S/) Well	Dec. 31, 2018 PEN (S/) Well
Disclosure of critical accounting estimates and judgments [line items]
Maximum exposure to tax contingencies	S/ 71.4	S/ 15.7
Percentage of increase/ decrease in Group's gross margins considered for sensitivity analysis	10.00%	10.00%
Pre-tax discount rate used for present value calculation, bond rate period description	3, 5 and 30-year rate used on U.S. bonds
Period to initiate legal actions	8 years
Recovery percent of legal action amount	50.00%
Block one [member]
Disclosure of critical accounting estimates and judgments [line items]
Pre-tax discount rate used for present value calculation	1.58%	2.46%
Block five [member]
Disclosure of critical accounting estimates and judgments [line items]
Pre-tax discount rate used for present value calculation	1.66%	2.51%
Block III [member]
Disclosure of critical accounting estimates and judgments [line items]
Pre-tax discount rate used for present value calculation	2.33%	2.98%
Block IV [member]
Disclosure of critical accounting estimates and judgments [line items]
Pre-tax discount rate used for present value calculation	2.33%	2.98%
Gasoducto Sur Peruano [member]
Disclosure of critical accounting estimates and judgments [line items]
Percentage of Net Carrying Amount (NCA) of the Concession assets	72.25%
Bottom of range [member] | Viva GyM S.A. [member]
Disclosure of critical accounting estimates and judgments [line items]
Percentage of voting rights held in subsidiaries	30.00%
Top of range [member] | Viva GyM S.A. [member]
Disclosure of critical accounting estimates and judgments [line items]
Percentage of voting rights held in subsidiaries	50.00%
Parent company operation [member] | Promotora Larcomar S.A. [member]
Disclosure of critical accounting estimates and judgments [line items]
Percentage of equity interest in subsidiaries	46.55%	46.55%
Talara, Piura [member]
Disclosure of critical accounting estimates and judgments [line items]
Number of wells closed | Well	189	158
Present value of estimated provision for closure of wells	S/ 50.1	S/ 20.3

XML

Intangible Assets - Summary of Goodwill Allocated to Cash-Generating Units (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure Of Goodwill [line items]
Goodwill	S/ 57,367	S/ 93,288	S/ 116,804
Engineering and Construction [member]
Disclosure Of Goodwill [line items]
Goodwill	36,632	71,621	75,051
Electromechanical [member]
Disclosure Of Goodwill [line items]
Goodwill	S/ 20,735	20,737	20,737
Mining and construction services [member]
Disclosure Of Goodwill [line items]
Goodwill			13,366
IT equipment and services [member]
Disclosure Of Goodwill [line items]
Goodwill		S/ 930	930
Telecommunications services [member]
Disclosure Of Goodwill [line items]
Goodwill			S/ 6,720

XML

Consolidated Statement of Changes in Equity - PEN (S/) shares in Thousands, S/ in Thousands	Total	CAM Group [member]	Stracon GyM S.A. [member]	Issued capital [member]	Legal reserve [member]	Voluntary reserve [member]	Share premium [member]	Other reserves [member]	Retained earnings [member]	Retained earnings [member] CAM Group [member]	Retained earnings [member] Stracon GyM S.A. [member]	Equity attributable to owners of parent [member]	Equity attributable to owners of parent [member] CAM Group [member]	Non-controlling interests [member]	Non-controlling interests [member] CAM Group [member]	Non-controlling interests [member] Stracon GyM S.A. [member]
Beginning balance, shares at Dec. 31, 2016				660,054
Beginning balance at Dec. 31, 2016	S/ 2,489,737			S/ 660,054	S/ 132,011	S/ 29,974	S/ 882,464	S/ (167,456)	S/ 443,377			S/ 1,980,424		S/ 509,313
Statement [line items]
(Loss) profit for the period	209,238								148,738			148,738		60,500
Cash flow hedge	482							458				458		24
Adjustment for actuarial gains and losses	(4,031)								(2,948)			(2,948)		(1,083)
Foreign currency translation adjustment	(11,341)							(9,166)				(9,166)		(2,175)
Exchange difference from net investment in a foreign operation	6,610							6,493				6,493		117
Total comprehensive income for the year	200,958							(2,215)	145,790			143,575		57,383
- Dividend distribution	(59,677)													(59,677)
- Contributions (devolution) of non-controlling shareholders, net	(33,197)													(33,197)
- Additional acquisition of non-controlling interest	(942)						(669)					(669)		(273)
- Deconsolidation of former subsidiary	(7,801)													(7,801)
Total transactions with shareholders	(101,617)						(669)					(669)		(100,948)
Ending balance, shares (Restated balance [member]) at Dec. 31, 2017				660,054
Ending balance, shares at Dec. 31, 2017				660,054
Ending balance (Increase (decrease) due to changes in accounting policy required by IFRSs [member]) at Dec. 31, 2017	(53,543)								(52,564)			(52,564)		(979)
Ending balance (Restated balance [member]) at Dec. 31, 2017	2,535,535			S/ 660,054	132,011	29,974	881,795	(169,671)	536,603			2,070,766		464,769
Ending balance at Dec. 31, 2017	2,589,078			660,054	132,011	29,974	881,795	(169,671)	589,167			2,123,330		465,748
Statement [line items]
(Loss) profit for the period	57,415								(83,188)			(83,188)		140,603
Cash flow hedge	119							113				113		6
Adjustment for actuarial gains and losses	16,589								16,589			16,589
Foreign currency translation adjustment	5,733							6,930				6,930		(1,197)
Exchange difference from net investment in a foreign operation	(8,147)							(7,992)				(7,992)		(155)
Total comprehensive income for the year	71,709							(949)	(66,599)			(67,548)		139,257
- Dividend distribution	(102,772)													(102,772)
- Contributions (devolution) of non-controlling shareholders, net	(84,442)													(84,442)
- Additional acquisition of non-controlling interest	(13,633)						(9,583)					(9,583)		(4,050)
- Capital Increase	137,603			S/ 69,380			68,223					137,603
- Capital Increase, shares				69,380
- Deconsolidation of former subsidiary		S/ (24,657)	S/ (29,412)				51,709			S/ (42,878)	S/ (51,709)		S/ (42,878)		S/ 18,221	S/ (29,412)
Total transactions with shareholders	(117,313)			S/ 69,380			110,349		(94,587)			85,142		(202,455)
Total transactions with shareholders, shares				69,380
Ending balance, shares (Restated balance [member]) at Dec. 31, 2018				729,434
Ending balance, shares at Dec. 31, 2018				729,434
Ending balance (Increase (decrease) due to changes in accounting policy required by IFRSs [member]) at Dec. 31, 2018	(1,462)								(1,462)			(1,462)
Ending balance (Restated balance [member]) at Dec. 31, 2018	2,488,469			S/ 729,434	132,011	29,974	992,144	(170,620)	373,955			2,086,898		401,571
Ending balance at Dec. 31, 2018	2,489,931			729,434	132,011	29,974	992,144	(170,620)	375,417			2,088,360		401,571
Statement [line items]
(Loss) profit for the period	(838,642)								(884,721)			(884,721)		46,079
Cash flow hedge	6							6				6
Foreign currency translation adjustment	(8,170)							(6,440)				(6,440)		(1,730)
Exchange difference from net investment in a foreign operation	(456)							(452)				(452)		(4)
Total comprehensive income for the year	(847,262)							(6,886)	(884,721)			(891,607)		44,345
- Dividend distribution	(12,762)													(12,762)
- Contributions (devolution) of non-controlling shareholders, net	(32,996)													(32,996)
- Additional acquisition of non-controlling interest							1,883					1,883		(1,883)
- Capital Increase	280,636			S/ 142,484			138,152					280,636
- Capital Increase, shares				142,484
Total transactions with shareholders	234,878			S/ 142,484			140,035					282,519		(47,641)
Total transactions with shareholders, shares				142,484
Ending balance, shares at Dec. 31, 2019				871,918
Ending balance at Dec. 31, 2019	S/ 1,876,085			S/ 871,918	S/ 132,011	S/ 29,974	S/ 1,132,179	S/ (177,506)	S/ (510,766)			S/ 1,477,810		S/ 398,275

XML

Cover	12 Months Ended
	Dec. 31, 2019 shares
Cover [Abstract]
Document Type	20-F
Amendment Flag	false
Document Period End Date	Dec. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Trading Symbol	GRAM
Entity Registrant Name	Grana & Montero S.A.A.
Entity Central Index Key	0001572621
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding	871,917,855
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Accounting Standard	IFRS
Document Annual Report	true
Document Transition Report	false
Entity Voluntary Filers	No
Entity Interactive Data Current	Yes
Entity Address, Country	PE
Document Shell Company Report	false
Title of 12(b) Security	Common Shares, par value s/1.00 per share
Security Exchange Name	NYSE

XML

Bonds - Rollforwards of Bonds (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of detailed information about borrowings [line items]
Balance at January, 1	S/ 937,042
Balance at December, 31	924,042	S/ 937,042
GyM Ferrovias S.A. [member]
Disclosure of detailed information about borrowings [line items]
Balance at January, 1	611,660	603,657	S/ 604,031
Amortization	(11,330)	(10,178)	(19,141)
Accrued interest	48,253	48,130	49,132
Interest paid	(30,086)	(29,949)	(30,365)
Balance at December, 31	618,497	611,660	603,657
Norvial S.A. [member]
Disclosure of detailed information about borrowings [line items]
Balance at January, 1	325,382	343,910	363,684
Amortization	(20,005)	(18,736)	(20,010)
Accrued interest	23,482	24,170	2,987
Capitalized interest	2,725	3,361	26,011
Interest paid	(26,039)	(27,323)	(28,762)
Balance at December, 31	S/ 305,545	S/ 325,382	S/ 343,910

XML

Loss Per Share

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Loss Per Share

34 LOSS PER SHARE

The basic loss per common share has been calculated by dividing the loss of the year attributable to the Group’s common shareholders by the weighted average of the number of common shares outstanding during that year. No diluted loss per common share has been calculated because there is no potential diluent common or investment shares (ie, financial instruments or agreements that entitle to obtain common or investment shares); therefore, it is the same as the loss per basic share. The basic loss per common share is as follows:

		2017			2018			2019
Loss attributable to owners of the Company during the year			148,738			(83,188	)		(884,721	)
Weighted average number of shares in issue at S/1.00 each, at December 31,			660,053,790			665,835,490			822,213,119
Basic loss per share (in S/)	(*)		0.225			(0.125	)		(1.076	)
Loss from continuing operations attributable to owners of the Company during the year			(66,577	)		(65,888	)		(840,762	)
Weighted average number of shares in issue at S/1.00 each, at December 31,			660,053,790			665,835,490			822,213,119
Basic loss per share (S/)	(*)		(0.101	)		(0.099	)		(1.023	)

(*) The Group does not have common shares with dilutive effects at December 31, 2018 and 2019.

XML

Equity - Additional Information (Detail) S/ / shares in Units, $ / shares in Units, $ in Millions		12 Months Ended
	Nov. 06, 2018 USD ($) $ / shares shares	Dec. 31, 2019 PEN (S/) S/ / shares shares	Dec. 31, 2018 PEN (S/) S/ / shares shares	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2014	Apr. 02, 2019 PEN (S/) shares	Dec. 31, 2013 PEN (S/)
Disclosure of classes of share capital [line items]
Capital increase | $	$ 130
Capital increase shares subscribed							142,483,663
Number of shares represents as capital	211,864,407
Authorized capital | S/							S/ 871,917,855
Par value per share | (per share)	$ 0.6136		S/ 1.00
Number of shares subscribed			69,380,402
Number of shares represents as capital		729,434,192
Number of shares registered in public registries			660,053,790
Number of shares in process of registration			69,380,402
Number of equity shares per American Depository Shares | S/ / shares			S/ 5
Quoted share price | S/ / shares		S/ 1.70	S/ 1.99
Trading frequency, percentage		95.24%	91.60%
Percentage of net profit transferred to legal reserve		10.00%
Maximum allowed percentage to legal reserve to paid-in capital		20.00%
Voluntary reserve | S/		S/ 29,974,000	S/ 29,974,000
Excess of total income obtained by shares issued over nominal value | S/		S/ 138,900,000	S/ 68,200,000					S/ 1,055,500,000
Dividend rate percentage					6.80%	4.10%
Ordinary shares [member]
Disclosure of classes of share capital [line items]
Number of shares		218,043,480	41,586,332
American depository shares [member]
Disclosure of classes of share capital [line items]
Number of shares		43,608,696	207,931,660
2017 and onwards [member]
Disclosure of classes of share capital [line items]
Dividend rate percentage				5.00%

XML

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Basis of preparation

2.1 Basis of preparation

The consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations issued by the IFRS Interpretations Committee (IFRIC) applicable to companies reporting under IFRS. The financial statements comply with IFRS as issued by the IASB in force as of December 31, 2018, and December 31, 2019, respectively.

The consolidated financial statements have been prepared under the historical cost convention, except for derivative financial instruments, financial assets at fair value through profit or loss, and available-for-sale financial assets measured at fair value. The financial statements are presented in thousands of Peruvian Sol unless otherwise stated.

The preparation of the consolidated financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires that the Management exercise its critical judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

Consolidation of financial statements

2.2 Consolidation of financial statements

a) Subsidiaries

Subsidiaries are entities over which the Company has control. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date when control ceases.

The Group applies the acquisition method to account for business combinations. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

The Group evaluates the measurement of the non-controlling interest on an acquisition-by-acquisition basis. As of December 31, 2018, and 2019, the measurements of the non-controlling interest in the Group’s acquisitions were made at the non-controlling interest’s proportionate share of the recognized amounts of the acquiree’s identifiable net assets.

Business acquisition-related costs are expensed as incurred.

Any contingent consideration assumed by the Group with the selling party is recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration are recognized in accordance with IFRS 9 “Financial Instruments” as profit or loss.

Goodwill is initially measured as the excess of the acquisition cost, the fair value at the acquisition date of any interest previously acquired plus the fair value of the non-controlling interest, over the net identifiable assets acquired and liabilities and contingent liabilities assumed. If the acquisition cost is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized in profit or loss at the time of acquisition.

For consolidating subsidiaries, balances, income, and expenses from transactions between Group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognized as assets are also eliminated. Group companies use common accounting practices, except for those that are specifically required for specific businesses.

b) Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions, in other words as transactions with owners in their capacity as owners. The difference between the fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interest are also recorded in equity at the time of disposal.

c) Disposal of subsidiaries

When the Group ceases to have control over a subsidiary, any retained interest in the entity is re-measured at its fair value at the date when control is lost, with the change in carrying amount recognized in profit or loss at such date. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that the amount previously recognized in other comprehensive income is reclassified to profit or loss.

d) Joint arrangements

Contracts in which the Group and one or more of the contracting parties have joint control on the relevant joint activities are called joint arrangements.

Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. The Group has assessed the nature of its joint arrangements and determined them to be both joint ventures as well as joint operations.

Joint ventures are accounted for using the equity method. Under this method, interests in joint ventures are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the post-acquisition profits or losses and movements in the comprehensive income statement.

The Group assesses on an annual basis whether there is any objective evidence that the investment in the joint ventures and associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the impairment loss in share of the profit or loss in associates and joint ventures under the equity method of accounting in the income statement. In addition, the Group stops the use of the equity method if the entity ceases to be an operating entity.

Joint operations are joint arrangements whereby the parties that have joint control of the arrangement, have rights over the assets, and obligations for the liabilities, relating to the arrangement. Each party recognizes its assets, liabilities, revenue and cost and its share of any asset or liability jointly held and, on any revenue, or cost arisen from the joint operation.

In the Group, joint operations mainly relate to consortiums (entities without legal personality) created exclusively for the development of a construction contract. Considering that the only objective of the consortium is to develop a specific project, all revenue and costs are included within revenue from construction activities and cost of construction activities, respectively.

e) Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a holding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method (see section d) above).

Profits and losses resulting from transactions between the Group and its associates are recognized in the Group’s consolidated financial statements only to the extent of unrelated investor’s interests in the associates. Unrealized losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates are changed where necessary to ensure consistency with the policies adopted by the Group.

Impairment losses are measured and recorded in accordance with section d) above.

Segment reporting

2.3 Segment reporting

Operating segments are reported in a consistent manner with internal reporting provided to the Management of the Group.

If an entity changes the structure of its internal organization in a manner that causes the composition of its reportable segments to change, the Group restates the information for earlier periods unless the information is not available.

Foreign currency translation

2.4 Foreign currency translation

a) Functional and presentation currency

The consolidated financial statements are presented in Peruvian soles, which is the functional and presentation currency of the Group. All subsidiaries, joint arrangements, and associates use the Peruvian Sol as their functional currency, except for foreign entities, for which the functional currency is the currency of the country in which they operate.

b) Transactions and balances

Foreign currency transactions are translated into the functional currency using prevailing the exchange rates at the date of the transactions or valuation when items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in the consolidated income statement, except when deferred in other comprehensive income. Foreign exchange gains and losses of all monetary items are included in the income statement within financial income or expense.

Exchange differences arising on loans from the Company to its subsidiaries in foreign currencies are recognized in the separate financial statements of the Company and separate financial statements of the subsidiaries. In the consolidated financial statements, such exchange differences are recognized in other comprehensive income and are re-classified in the income statement on the disposal of the subsidiary or debt repayment to the extent such loans qualify as part of the “net investment in a foreign operation”.

c) Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency of the Group are translated into the presentation currency as follows:

i) Assets and liabilities for each statement of financial position are translated using the closing exchange rate prevailing at the date of the consolidated statement of financial position;

ii) income and expenses for each income statement are translated at the average exchange rate (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rate on the date of the transaction);

iii) capital is translated by using the historical exchange rate for each capital contribution made; and

iv) all exchange differences are recognized as separate components in other comprehensive income, within foreign currency translations adjustment.

Goodwill and fair value adjustments arising from the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated at the closing exchange rate. Exchange differences are recognized in other comprehensive income.

Public services concession agreements

2.5 Public services concession agreements

Concession agreements signed between the Group and the Peruvian Government entitle the Group, as a Concessionaire, to assume obligations for the construction or improvement of infrastructure and which qualify as public service concessions are accounted as defined by IFRIC 12 “Service Concession Arrangements”. The consideration to be received from the Government for the services of constructing or improving public infrastructure is recognized as a financial asset, an intangible asset or both, as stated below:

a) It is recognized as a financial asset to the extent that it has a contractual right to receive cash or other financial assets either because the Government secures the payment of specified or determinable amounts or because the Government will cover any difference arising from the amounts actually received from public service users in relation with the specified or determinable amounts. These financial assets are recognized initially at fair value and subsequently at amortized cost (financial asset model).

b) It is recognized as an intangible asset to the extent that the service agreement grants the Group a contractual right to charge users of the public service. The resulting intangible asset is measured at cost and is amortized as described in Note 2.15 (intangible asset model).

c) It is recognized as a financial asset and an intangible asset when the Group recovers its investment partially by a financial asset and partially by an intangible asset (bifurcated model).

Cash and cash equivalents

2.6 Cash and cash equivalents

In the consolidated statements of financial position and cash flows, cash and cash equivalents include cash on hand, on-demand bank deposits, other highly liquid investments with original maturities of three months or less and bank overdrafts. In the consolidated statement of financial position, bank overdrafts are included in the balance of borrowings as current liabilities.

Financial assets

2.7 Financial assets

2.7.1  Classification and measurement

The Group classifies its financial assets, according to its subsequent measurement, in the following categories: i) amortized cost; ii) financial assets at fair value through other comprehensive income and iii) financial assets at fair value through profit or loss. The classification depends on the purpose for which the financial assets were acquired on the basis of the Group’s business model for managing the financial assets and the characteristics of the contractual cash flows of the financial asset.

Management determines the classification of its financial assets at the date of its initial recognition and re-evaluates this classification at the date of each closing of its consolidated financial statements. As of December 31, 2018, and 2019, the Group only maintains financial assets in the following categories:

a) Amortized cost

This category is the most relevant for the Group. The Group measures financial assets at amortized cost if the following conditions are met:

i) The financial asset is held within a business model with the objective of maintaining the financial assets to obtain the contractual cash flows; and

ii) The contractual terms of the financial asset generate cash flows, on specific dates, that are only payments of the principal and interest on the amount of the outstanding principal.

Financial assets at amortized cost are subsequently measured using the effective interest method and are subject to impairment. Profits and losses are recognized in profits or losses when the asset is written off, modified or impaired.

Trade accounts receivable, accounts receivable from related companies, other accounts receivable, work in progress and cash and cash equivalents are included in current assets except for those over twelve months after the date of the consolidated statement of financial position. The latter are classified as non-current assets.

b) Financial assets at fair value through other comprehensive results

Financial assets at fair value through other comprehensive income of the Group are classified in this category when they meet the following conditions:

i) keep them within a business model whose objective is achieved by obtaining contractual cash flows and selling financial assets; and

ii) the contractual terms of the financial asset give rise, on specific dates, to cash flows that are only payments of the principal and interest on the outstanding principal amount.

The investment account at Inversiones en Autopistas S.A. is included in this category.

c) Financial assets at fair value through profit or loss

Financial assets that do not meet the criteria of amortized costs or fair value through other comprehensive income are measured at fair value through profit or loss. The result in a debt investment that is subsequently measured at fair value through gains and losses is recognized in the consolidated statement of comprehensive income in the period in which it occurs.

Financial assets at fair value through profit or loss are non-derivative financial assets designated by the Group at their fair value upon initial recognition and are held for sale. These are included in current assets.

2.7.2 Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights over the cash flows of the financial asset expire, or when it transfers the rights to receive the contractual cash flows in a transaction in which all the risks and benefits of ownership of the financial asset are substantially transferred, or does not transfer or retain substantially all the risks and benefits related to the property and does not retain control over the assets transferred.

The Group participates in transactions in which it transfers the assets recognized in its statement of financial position but retains all or substantially all the risks and advantages of the assets transferred, and/or control over them. In these cases, the assets transferred are not derecognized and are measured on a basis that reflects rights and obligations that the Group has retained.

Impairment of financial assets

2.8 Impairment of financial assets

IFRS 9 “Financial Instruments”, requires to register expected credit losses of all financial assets, except for those that are carried at fair value with an effect on results, estimating it over 12 months or for the entire life of the financial instrument (“lifetime”). In accordance with the provisions of the standard, the Group applies the simplified approach (which estimates the loss for the entire life of the financial instrument), for the commercial debtors of the rental business line of the real estate sector, and the general approach for the trade accounts receivables, work in progress and other accounts receivable; the same that requires evaluating whether or not a significant increase in risk exists to determine whether the loss should be estimated based on 12 months after the reporting date or during the entire life of the asset.

The Group has established a policy to conduct an evaluation, at the end of each reporting period, to identify whether the asset has suffered a significant increase in credit risk since the initial date. Both the credit losses expected at 12 months and the expected credit losses during the life of the asset are calculated individually or collectively, depending on the nature of the portfolio.

For financial assets for which the Group has no reasonable expectation of recovering, either the entire outstanding amount or a portion thereof, the gross carrying amount of the financial asset is reduced. This is considered a decrease in (partial) accounts of the financial asset.

Derivative financial instruments and hedging activities

2.9 Derivative financial instruments and hedging activities

Derivatives are initially recognized at fair value on the date a derivative contract is signed into and are subsequently re-measured at their fair value at the end of each reporting period. The method for recognizing the gain or loss resulting from changes in the fair value of the derivatives depends on whether they are designated as  hedging instrument, and if so, the nature of the item being hedged.

The Group designates certain derivatives as hedges of a particular risk associated with a recognized asset or liability (fair value hedge) or a highly probable forecast transaction (cash flow hedge). Derivatives are initially recognized at fair value on the date of subscription of the contract and are subsequently recognized at their fair value.

The Group documents, at the inception of the transaction, the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedges transactions. The Group also documents its assessment, both at hedge inception as at the date of each subsequent statement of financial position, of whether the derivatives used in hedges transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

The fair value of various derivative instruments used for hedging purposes and changes in the account reserves for hedges in equity are disclosed in Note 8. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity period of the hedged item is more than 12 months and as a current asset or liability when the remaining maturity period of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability.

Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as fair value hedges is recognized as other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in the income statement. Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss (for example, when the forecasted sale that is hedged takes place).

The gain or loss relating to the effective portion of interest rate swaps hedging variable rate borrowings is recognized in the income statement as “Financial income or Financial expenses”.

However, when the forecasted transaction that is hedged results in the recognition of a non-financial asset (for example, inventory or fixed assets), the gains or losses previously deferred in equity are transferred from equity and are included in the initial measurement of the cost of the non-financial asset. The deferred amounts are finally recognized in cost of goods sold in the case of inventory or depreciation in the case of fixed assets.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and will be reversed to income when the forecasted transaction is finally recognized in the statement of comprehensive income. When a forecasted transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement within “other income and expenses, net”.

Trade accounts receivables

2.10 Trade accounts receivables

Trade receivables are amounts due from customers for goods or services sold by the Group. If the collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets. In the Infrastructure segment, it includes the billing of the first purchase of trains as part of the model of the financial asset of the concessionaire GyM Ferrovías S.A (Note 2.5).

Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less any provision for impairment, except for receivables of less than one year that are stated at a nominal amount which is similar to their fair values since they are short term.

It includes management estimates related to the collection rights for services performed pending invoice and/or approval by client, which have been valued using the completion percentage method. It corresponds mainly to the Engineering and Construction segment (subsidiaries GyM S.A. and GMI S.A.). Regarding estimates in concessions, at the Infrastructure segment, corresponds to unconditional contractual collection rights to receive from the Grantor under the model of the financial asset (Note 2.5).

Work in progress

2.11 Work in progress

This account includes the balance of work in progress costs incurred that relates to future activities of the construction contracts and the constructions phase in concessions (see Note 2.26 for detail on revenue recognition from construction activities and concessions services).

Changes in estimates of contract revenues and costs can increase or decrease the estimated margin. When a change in the estimate is known, the cumulative impact of the change is recorded in the period in which it is known, based on the progress completed.

Inventories

2.12  Inventories

The inventories include land, works in progress and finished buildings related to the real estate activity, materials used in the construction activity and marketed supplies for exploration and extraction activities.

a) Real estate activity

Land used for the execution of real estate projects is recognized at acquisition cost. Work in progress and finished real estate includes the costs of design, materials, direct labor, borrowing costs (directly attributable to the acquisition, construction, production of the asset), other indirect costs and general expenses related to the construction.

Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Annually, the Group reviews whether inventories have been impaired identifying three groups of inventories to measure their net realizable value: i) land bought for future real estate projects which are compared to their net appraisal value; if the acquisition value is higher, a provision of impairment is recognized; ii) land under construction, impairment is measured based on cost projections; if these costs are higher than selling prices of each real estate unit, an impairment estimated is recorded; and iii) completed real estate units; these inventory items are compared to the selling prices less selling expenses; if these selling expenses are higher, a provision for impairment is recorded.

For the reductions in the carrying amount of these inventories to their net realizable value, a provision is recognized for impairment of inventories with a charge to profit or loss for the year in which those reductions occur.

b) Exploration and extraction activities

Inventories are valued at production costs or net realizable value (NRV), the one with the lowest result, on the basis of the weighted average method. The NRV represents the value at which it is estimated to make oil, gas and its derivatives LPG and HAS, which is calculated on the basis of international prices at which discounts that are usually granted are deducted. Miscellaneous supplies, materials, and spare parts are valued at cost or replacement value, whichever is less based on the average method. The cost of inventories excludes financing expenses and exchange differences. Inventories to be received are recorded at cost by the specific identification method.

The Group constitutes a devaluation of materials charged to income for the year in cases in which the book value exceeds its recoverable value.

c) Other activities

Materials and supplies are recorded at cost by the weighted average method or at their replacement value, the lower. The cost of these items includes freight and non-refundable applicable taxes.

The devaluation of these items is estimated on the basis of specific analyses made by the Management on its rotation. If it is identified that the book value of the stocks of materials and supplies exceeds their replacement value, the difference is charged to income in the year in which this situation is determined.

Management considers that as of the date of the consolidated financial statements it is not necessary to establish additional provisions to those recognized in the financial statements to cover losses due to obsolescence of these inventories.

Investment property

2.13  Investment property

Investment properties are shown at cost less accumulated depreciation and impairment losses, if any. Subsequent costs attributable to investment properties are capitalized only if it is probable that future economic benefits will flow to the Company and the cost of these assets can be measured reliably; if not, they are recognized as expenses when incurred.

Repair and maintenance expenses are recognized in profit and loss when they are incurred. If the property’s carrying amount is greater than its estimated recoverable amount, an adjustment to reduce the carrying amount to the recoverable amount is recognized.

Depreciation is determined by the straight-line method at a rate that is considered sufficient to absorb the cost of the assets and the end of the useful life and considered their significant components with useful lives substantially different (each component is treated separately for depreciation purposes). The estimated useful lives of those properties range from 3 to 33 years.

The investment properties held by the Group correspond to: (i) “Agustino Plaza” Shopping Center, located in the El Agustino District, and (ii) the stores situated within the stations of Line 1 of the Lima Metro; the properties owned by the subsidiary Viva GyM S.A. are represented by a fair value amount to US$18.7 million, equivalent to S/62.6 million as of December 31, 2019 (US$19.2 million, equivalent to S/64.3 million, as of December 31 of 2018).

These investment properties have been leased under the modality of an operating lease.

Property, plant and equipment

2.14  Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of these items.

Subsequent costs are included in the asset’s carrying amount or are recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Repairs and maintenance expenditures are charged to the statement of income during the financial period in which they are incurred.

Assets under construction are capitalized as a separate component. At their completion, the cost of such assets is transferred to their definitive category.

Replacement units are major spare parts in which depreciation starts when the units are installed for use within the related asset.

Depreciation of machinery, equipment and vehicles recognized as “Major equipment” are depreciated based on their hours of use. Under this method, the total number of work hours that machinery and equipment are capable of producing is estimated and a charge per hour is determined. The depreciation of other assets that do not qualify as “Major equipment” is calculated under the straight-line method to allocate their cost less their residual values over their estimated useful lives, as follows:

	Years
Buildings and facilities		Between 3 and 33
Machinery and equipment		Between 4 and 10
Vehicles		Between 2 and 10
Furniture and fixtures		Between 2 and 10
Other equipment		Between 2 and 10

Residual values and useful lives are reviewed and adjusted as appropriate at each reporting date. Gains and losses on disposals are recognized in “Other income and expenses, net” in the statement of income. Regarding joint operations that carry out construction activities, the difference between the proceeds from disposals of fixed assets and their carrying amount is shown within “revenue from construction activities” and “cost of construction activities”, respectively.

Intangible assets

2.15  Intangible assets

i) Goodwill

Goodwill arises on the acquisition of subsidiaries and represents the excess of the purchase consideration, the amount of any non-controlling interest and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the net identifiable assets acquired. If the payment made, the amount of the non-controlling interest recognized and previously held interest measured at fair value is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statement of income.

Goodwill acquired in a business combination is allocated to each cash-generating units (CGU), or group of CGUs, that is expected to benefit from the synergies of the combination. Goodwill is monitored at the operating segment level.

Goodwill impairment reviews are performed at least annually and when events or changes in circumstances indicate a potential impairment. Any impairment is recognized immediately as an expense in item “Other income and expenses, net” and cannot be reversed later.

ii) Trademarks

Trademarks acquired separately are shown at historical cost. Trademarks acquired in a business combination are recognized at fair value at the acquisition date. Management has determined that these trademarks have indefinite useful lives.

Trademark impairment reviews are performed at least annually and when events or changes in circumstances indicate a potential impairment. Any impairment is recognized immediately as an expense in item “Other income and expenses, net”. The carrying amount that has been subject to impairment is reviewed at each reporting date to verify possible reversals of the impairment and is recognized in the “other income and expenses, net” item.

iii) Concession rights

The intangible asset consisting of the right to charge users for the services related to service concessions agreements (Note 2.5 and Note 6.b) is initially recorded at the fair value of construction or improvement services and before amortization is started, an impairment test is performed; it is amortized under the straight-line method, from the date revenue starts using the lower of its estimated expected useful life or effective period of the concession agreement.

iv) Contractual relationships with customers

Contractual relationships with customers are assets resulting from business combinations that were initially recognized at fair value as determined based on the expected cash flows from those relations over a period based on the estimated permanent of the Group’s customer (the estimation of useful life is based on the term of the contract with customers which fluctuate between 5 and 9 years). The useful life and the impairment of these assets are individually assessed.

v) Cost of development wells

Costs incurred to prepare the wells to extract hydrocarbons from Blocks I and V are capitalized as part of the intangible asset. The Group capitalizes the costs of the development phase associated with wells preparation for extraction. The last investment made in these wells were in 2015. These costs are amortized based on the useful lives of the wells (5 years for the oil lots). The produced units method applies to license agreements for Blocks III and IV. In 2017, the Group has considered depreciation or amortization for the wells in Block IV based on produced units, as well as the tangible proportional part of the wells.

vi) Software and development costs

Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognized as intangible assets when the following criteria are met:

• technically feasible to complete the software product so that it will be available for use.

• management intends to complete the software product and use or sell it.

• there is the ability to use or sell the software product.

• it can be demonstrated how the software product will probably generate future economic benefits.

• technical, financial and other resources are available to complete the development and to use or sell the software product; and

• expenses incurred during its development can be reliably measured.

Other development costs that do not meet these criteria are recognized in the statement of income as incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period. Computer software development costs recognized as assets are amortized over their estimated useful lives, which fluctuate between 2 to 15 years.

vii) Land use rights

Refers to the rights maintained by the subsidiary Promotora Larcomar S.A. Land use of rights are stated at historical cost less amortization and any accumulated impairment losses. The useful life of this asset is based on the agreement signed (60 years) and may be extended if agreed by parties. Amortization will begin when it becomes ready for its intended use by Management.

Impairment of non-financial assets

2.16  Impairment of non-financial assets

Assets subject to amortization are subject to impairment tests when events or circumstances occur that indicate that their book value may not be recovered. Impairment losses are measured as the amount by which the book value of the asset exceeds its recoverable value. The recoverable value of the assets corresponds to the higher of its fair value and its value in use. For purposes of the impairment assessment, assets are grouped at the lowest levels in which they generate identifiable cash flows (cash-generating units). The book value of non-financial assets other than goodwill that have been subject to write-offs for impairment is reviewed at each reporting date to verify possible reversals of impairment.

Financial liabilities

2.17 Financial liabilities

The financial liabilities of the Group include trade accounts payable, accounts payable to related parties, remuneration and other accounts payable. All financial liabilities are initially recognized at fair value and subsequently valued at amortized cost using the effective interest rate method.

Financial liabilities are classified as current liabilities if the payment must be made within a year or less (or in the normal operating cycle of the business if it is greater). Otherwise, they are presented as non-current liabilities.

Trade accounts payables

2.18 Trade accounts payable

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Accounts payable are initially recognized at their fair value and subsequently are amortized at amortized cost using the effective interest method, except for accounts payable within less than one year that are recorded at their nominal value that is similar to their fair value due to its maturity in the short term.

Other financial liabilities

2.19 Other financial liabilities

Corresponds to the loans and bonds issued by the Group, which are initially recognized at their fair value, net of the costs incurred in the transaction. These financial liabilities are subsequently recorded at amortized cost; any difference between the funds received (net of transaction costs) and the redemption value is recognized in the statement of income during the period of the loan using the effective interest method.

The costs incurred to obtain these financial liabilities are recognized as transaction costs to the extent that it is probable that part or the entire loan will be received. In this case, these charges are deferred until the time the loan is received.

Borrowing costs

2.20 Borrowing costs

Debt costs are recognized at the statement of income in the period in which they have been incurred, except for intangible assets and inventories in which the borrowing costs are capitalized.

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualified assets, which are assets that necessarily take a substantial period (more than 12 months) to reach their condition of use or sale, are added to the cost of said assets until the period when the assets are substantially ready for use or sale. The Group suspends the capitalization of borrowing costs during the periods in which the development of activities of a qualified asset has been suspended. The income obtained from the temporary investment of specific loans that have not yet been invested in qualified assets is deducted from the borrowing costs eligible for capitalization.

Current and deferred income tax

2.21 Current and deferred income tax

Income tax expense comprises current and deferred tax. Tax expense is recognized in the statement of income, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, tax is also recognized in the statement of comprehensive income or directly in equity, respectively.

The current income tax is calculated based on the tax laws enacted at the date of the statement of financial position in the countries where the Company and its subsidiaries operate and generate taxable income. Management, where appropriate, establishes provisions based on amounts expected to be paid to the tax authorities.

Deferred tax is recognized on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred income tax is determined using tax rates (and legislation) that have been enacted as of the date of the statement of financial position and that are expected to be applicable when the deferred income tax is realized or paid.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Group, and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax arising from the initial recognition of goodwill is not recognized; likewise, the deferred tax is not recorded if it arises from the initial recognition of an asset or liability in a transaction that is not a business combination that does not affect the accounting or tax profit or loss at the time of the transaction.

Employee benefits

2.22 Employee benefits

The Group recognizes a liability when the employee has rendered services in exchange for which is entitled to receive future payments and an expense when the Group has consumed the economic benefit from the service provided by the employee in exchange for the benefits in question.

The Group determines employee benefits in accordance with current labor and legal regulations and classifies them as short-term benefits, post-employment benefits, long-term benefits, and termination benefits.

Short-term benefits are those other than termination indemnities, whose payment is settled in the twelve months following the end of the period in which the employees have rendered the services; they correspond to current remunerations (salaries, wages and contributions to social security), annual paid and sick absences, participation in profits and incentives and other non-monetary benefits.

Post-employment benefits are those other than termination benefits that are paid after completing the period of employment with the entity. Retirement benefits or post-employment benefit plans can be classified into (i) Defined contribution plans and (ii) Defined benefit plans. The Group maintains defined benefit plans and therefore assumes the actuarial risk.

Long-term benefits are those benefits that must be paid more than twelve months after the end of the period in which the services were rendered. As of December 31, 2018, and 2019, the Group does not grant benefits in this category.

Termination benefits are those benefits payable as a result of (i) the entity’s decision to terminate the employee’s contract before the retirement date, and (ii) the employee’s decision to voluntarily accept the conclusion of the relationship of work.

Short-term benefits:

a) Current salaries and wages

The current remunerations are constituted by salaries, wages, contributions to social security, statutory bonuses and compensation for the time of services. Salaries, wages, and contributions to social security are settled on a monthly basis.

Entities of the Group recognize the expense and the related liability for statutory bonuses based on applicable laws and regulations effective in Peru, Chile, and Colombia. In Peru bonuses correspond to two monthly payments, settled one in July and one in December of each year, and accrue based on the consideration of the service.

The compensation for the time of service corresponds to the indemnification rights of the staff, and is accrued based on the consideration of the service calculated according to the legislation in force in each country in which the entities of the Group operate and determine as follows: (i) in Peru it is equivalent to half the remuneration in force at the date of payment through a deposit in bank the workers’ accounts in May and November of each year; (ii) In Colombia, it is equivalent to 8.33% of the monthly remuneration, (iii) In Chile this benefit is not available.

b) Annual paid absences

Annual holidays are recognized on an accrual basis. The provision for the estimated obligation for the annual vacations of personnel resulting from the services rendered by employees is recognized on the date of the consolidated statement of financial position and corresponds; (i) one month for personnel in Peru, (ii) fifteen days for personnel in Colombia, and (iii) in the case of Chile, they are subject to the worker’s seniority and range from fifteen to thirty days.

c) Workers’ profit sharing and incentives

The workers’ profit sharing is determined on the basis of the legal provisions in force in each country where the entities of the Group operate, as follows: (i) in Peru it is equivalent to 5% of the taxable base determined by each entity of the Group, in accordance with current income tax legislation, (ii) in Chile, workers’ participation is a component of the remuneration (equivalent to 4.75 minimum wages per year) and not a determinable percentage of the profit, (iii) in Colombia these benefits are not provided to employees.

Post-employment benefits

The indirect subsidiary Cam Chile Spa has a pension plan for its staff. The liability recognized in the statement of financial position with respect to defined benefit plan is measured based on the present value of the obligation at the end of the reporting period less the fair value of the planned assets.

The present value of the defined benefit obligations is determined by discounting the estimated future cash flows using the interest rates of high-quality corporate bonds denominated in the currency in which the benefits will be paid and with maturity periods similar to the obligations for pension plans. In countries where there is no market with instruments with similar characteristics, the market rate of government bonds will be used.

The remeasurements that arise from adjustments and changes in the actuarial assumptions are recorded in other comprehensive income in the period in which they arise.

Termination benefits

The Group entities recognize the liability and expense for severance payments when they occur, based on the legal provisions in force in each country. In accordance with the legislation of Peru, the compensation for arbitrary dismissal for personnel with an indefinite contract amounts to 1.5 times the monthly remuneration for each year worked.

In Colombian legislation, for the first year worked, the equivalent of 30 days of salary is granted, and from the second year on, the compensation will be the equivalent of 20 days of salary for each additional year (or the proportion); in the legislation of Chile is granted compensation of thirty days of salary for each year worked with a maximum salary of 330 days.

Provisions

2.23 Provisions

a) General

Provisions are recognized when i) the Group has a present, legal or constructive obligation as a result of past events; ii) it is probable that an outflow of resources will be required to settle the obligation; and iii) the amount has been reliably estimated. Provisions are reviewed at year - end. If the time value of money is significant, provisions are discounted using a pre-tax rate that reflects, when applicable, the specific risks related to the liability. Reversal of the discount due to the passage of time results in the obligation being recognized with a charge to the statement of income as a financial expense.

Contingent obligations when their existence will only be confirmed by future events or their amount cannot be reliably measured. Contingent assets are not recognized and are disclosed only if it is probable that the Group will generate an income from economic benefits in the future.

b) Provision for the closure of production wells

The subsidiary GMP S.A. recognizes a provision for the closure of operating units that correspond to the legal obligation to close oil production wells once the production phase has been completed. At the initial date of recognition, the liability that arises from this obligation measured at its fair value and discounted at its present value, according to the valuation techniques established by IFRS 13, “Fair Value Measurement”, and is simultaneously charged to the intangible account in the consolidated statement of financial position.

Subsequently, the liability is increased in each period to reflect the financial cost considered in the initial measurement of the discount, and the capitalized cost is depreciated based on the useful life of the related asset. When a liability is settled, the subsidiaries recognize any gain or loss that may arise. The fair value changes estimated for the initial obligation and the interest rates used to discount the flows they are recognized as an increase or decrease in the book value of the obligation and the asset to which they relate to, any decrease in the provision, and any decrease of the asset that may exceed the carrying amount of said asset is immediately recognized in the consolidated statement of income.

If the review of the estimated obligation results in the need to increase the provision and, accordingly, increase the carrying amount of the asset, the subsidiaries should also take into consideration if the said increase corresponds to an indicator that the asset has been impaired and, if so, impairment tests are to be carried out (Note 2.16).

Put option arrangement

2.24 Put option arrangement

The subsidiary GyM S.A. signed a sale option contract on the equity of its subsidiary Morelco SAS (Note 32 a) that allows the shareholder to reallocate its shares over a period of 10 years. The amount payable under the option is initially recognized at the present value of the reimbursement under “Other accounts payable”, directly charged to equity. The charge to equity is recorded separately as put options subscribed on the non-controlling interest, adjacent to the non-controlling interest in the net assets of the consolidated subsidiaries.

Subsequently, the financial liability is updated by changes in the assumptions on which the estimation of the expected cash flows is based and by the financial component due to the passage of time. The effects of this update are recognized in results. In the event that the option expires without being exercised, the liability is written off with the corresponding adjustment to equity.

Capital

2.25 Capital

Common shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity, as a deduction, of the proceeds, net of taxes.

Revenue recognition from contracts with customers

2.26 Revenue recognition from contracts with customers

Revenues from contracts with customers are recognized, for each performance obligation, either during a period of time or at a specific time, depending on which method best reflects the transfer of control of the underlying products or services to the obligation of particular performance with the client.

The Group recognizes the income through the application of the five steps defined in the regulation i) identification of the contract with the client; ii) identification of performance obligations in the contract; iii) determination of the price of the transaction; iv) allocation of the transaction price for performance obligations; and v) recognition of income when (or as) a performance obligation is satisfied.

Subsequently, the Group policy of recognition of each type of income according to IFRS 15:

i) Engineering and construction

Revenues from engineering and construction contracts are recognized over time as the Company performs its obligations because there is a continuous transfer of control of the deliverable to the customer pursuant to the terms of such contracts. For this reason, the Company accounts for revenue over time by measuring the progress towards complete satisfaction of its performance obligations under each contract. In this manner, revenues are accounted for using the percentage-of-completion method, based on surveys of performance by the Company’s experts who review the work performed to date under each contract.

The Company recognizes revenue based on surveys of work to date, using the output method, which is the direct measurement of the value to the customer of the construction services completed to date relative to the remaining services to be performed under the contract. The Company believes that the use of the output method based on surveys of performance provides a faithful depiction of the transfer of services by the Company to the customer because it reflects an enforceable right to payment from the Company for the work completed to date.

The contract generates assets when the costs incurred are greater than the cost associated with those revenues. Otherwise liabilities are generated for the accrued costs not invoiced. When it is probable that the total costs of the contract will exceed the related revenue, the expected loss is immediately recognized.

Revenues for additional work resulting from a modification or an instruction received from the customer to make a change in the scope of work or the price, or both, will result in an increase in contract revenue. The Company does not account for contract modifications unless approved by the customer. In addition, the Company reviews the enforceability of changes to the rights and obligations in contract modifications.

As part of its evaluation of whether changes to the rights and obligations in a contract modification are enforceable, the Company considers whether one or more of the following factors has been satisfied: a) the contract, applicable law or other evidence provides a legal basis for the modification; b) additional costs were caused by circumstances that were unforeseen on the date of execution of the contract and not a result of deficiencies incurred by the Company’s performance; c) modification-related costs are identifiable and considered reasonable in view of the work performed; or d) evidence supporting the modification is objective and verifiable. When one or more of the foregoing factors is satisfied, the changes to the rights and obligations in the contract modification are considered by the Company to be enforceable.

The Company estimates the change in the transaction price arising from the contract modification if the transaction price has not yet been approved by the customer in accordance with the requirements of IFRS 15 to estimate variable consideration. In order to include variable consideration related to a contract modification in the estimated transaction price, the Company must conclude that it is ‘highly probable’ that a significant revenue reversal will not occur. The Company determines the probability that the revenue reversal will occur (and therefore whether such price will be recovered) based on an analysis of whether any of the following factors is present: i) contractual entitlement; ii) past practices with the customer; iii) specific discussions or preliminary negotiations with the customer; and iv) verbal approval by the customer. If, as a result of such analysis, the Company concludes that it is ‘highly probable’ that a significant reversal in the amount of revenue recognized will not occur, it recognizes the variable consideration relating to the contract modification.

When the contract profit cannot be estimated reliably, the associated revenue is recognized to the extent of costs incurred are recoverable. Revenue is billed once approval is received by the owners of the work in progress.

The nature of certain of the Company’s contracts, namely cost-plus fee contracts in its E&C segment and unit price or similar contracts in its E&C segment and certain services it provides in its Infrastructure segment, give rise to variable consideration. Depending on the type of contract, this variable consideration may include reimbursable or target costs; variable number of units; award and incentive fees; and penalties. The Company estimates the amount of revenue to be recognized as variable consideration using the expected value method or the most likely amount method, whichever is expected to better predict the amount of consideration to which the Company will be entitled. These methods require the Company to estimate costs, unit quantities, award/incentive fees and penalties. In making such estimates, judgments are required to evaluate potential variances in the cost of materials, the cost of labor, productivity levels, the impact of change orders, liability claims and contract disputes, the achievement of contractual performance standards, and other contingencies.”

ii) Real-estate – Real estate, urban and industrial lots

Sale of Real estate

Revenue from sales of real estate properties is recognized when control over the property has been transferred to the client with the delivery record. Revenue is measured based on the price agreed under the contract. Until this is met, the incomes received will be counted as customer advances. These sales contracts have two performance obligations: i) the one corresponding to the transfer of the property, which includes the common areas of the building where these real estates are located, and ii) the one corresponding to the transfer of the common area outside the real estate assets but that are part of the real estate projects, which are recognized when the common area has been delivered.

Sale of urban lots

Revenue related to sales of urban lots is recognized when control over the property is transferred to the customer. Until this is met, the incomes received will be recognized as customer advances. Revenue is measured based on the transaction price agreed under the contract. These sales contracts have a single performance obligation for the sale of lots, which is executed upon delivery of the sale of the assets.

Sale of industrial lots

Revenue related to sales of industrial lots is recognized when control over the property has been transferred to the customer. Until this is met, the incomes received will be counted as customer advances. These sales contracts have two performance obligations: i) transfer of the industrial lot and ii) urban authorization of the industrial lot.

iii) Infrastructure

Revenue for provided services of oil and gas extraction, fuel dispatch and other services

The revenue from providing these services is recognized at the time the service is provided, calculating the service actually provided as a portion of the total services to be provided. This type of income has a single performance obligation; that is performed when the service is provided at a time moment.

Revenue from the sale of oil and derivative products

Revenue from the sale of goods is recognized when the control of the assets is transferred to the customer, which is when the goods are delivered. In this type of income there is only one performance obligation for the sale of oil; which is executed at the delivery of the goods.

Revenue from concession services

Revenues from concession services correspond to operation and maintenance services and are recognized according to their nature in the period in which the service is provided. In this revenue there is only one performance obligation, executed when the service is provided.

Recognition of cost and expenses

2.27 Recognition of cost and expenses

Engineering and construction contracts

Contract costs include all direct costs such as materials, labor, subcontracting costs, manufacturing and supply costs of equipment, start-up costs, depreciation and amortization, and indirect costs. Periodically, the Group evaluates the reasonableness of the estimates used in the determination of the total estimated contract cost. If, as a result of this evaluation, there are modifications to the revenue or cost previously estimated, or if the total estimated cost of the project exceeds expected revenues, an adjustment is made in order to reflect the effect in results of the period in which the adjustment or loss is incurred.

Costs for sale of oil and derivative products

The costs of the services rendered and the costs of sales of petroleum and derivative products are recognized when they are incurred, simultaneously with the recognition of related revenues. Other costs and expenses are recognized as they accrue, regardless of when they are paid and are recorded in the accounting periods to which they relate.

Costs for concession operation services

The costs of the operation and maintenance services are recognized when they are incurred, simultaneously with the recognition of related revenues. Other costs and expenses are recognized as they are accrued, regardless of when they are paid and are recorded in the accounting periods with which they are related.

Leases

2.28 Leases

Lease contracts are analyzed for the purpose of identifying those containing the characteristics according to IFRS 16 Leases (hereinafter “IFRS 16”) for recognition, measurement, presentation and disclosure.

The Group evaluates in every lease contract the following:

• If it has the right to control the use of the identified asses,

• If the contract term is longer than twelve months,

• If the underlying asset amount is a material amount, and,

• That the fees to be paid are not entirely variable.

a) Leases in which the Group is a lessee

The Group recognizes a right-of-use asset and a lease liability as of the beginning of the lease.

The right-of-use asset is initially measured by the initial amount of the lease liability adjusted for any lease payment made on or before the start date, plus the initial direct costs incurred. The right-of-use assets are depreciated in a straight line, from the start date until the end of the lease contract. The term of the lease includes the periods covered by an option to extend the contract if the Group is reasonably sure to exercise that option.

The lease liability is the total unpaid installments, measured at amortized cost using the effective interest method. It is measured again when there is a change in future lease payments that arise from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be paid under a residual value guarantee, or if the Group changes its assessment of whether it is sure that it will exercise a purchase, extension or term option.

When the lease liability is measured again, the carrying amount of the right-of-use asset is adjusted.

In the engineering and construction segment, interest expenses related to leasing contracts of the core business are reported in the gross margin; the rest of the group segments, report them in financial expenses.

Operational cash flows will be greater since cash payments for the main portion of the lease debt are classified within the financing activities. Only the part of the payments that reflects interest can continue to be presented as operating cash flow.

b) Leases in which the Group is a lessor

Liabilities for operating leases and assets are included in the statement of financial position according to the nature of the asset. Revenues from operating leases are recognized in a straight line over the term of the lease agreement and the incentives granted to lessees are reduced from rental income.

Based on the foregoing, the Group as lessor has not changed the recognition of its leases.

c) Treatment before the implementation of IFRS 16

Leases in which the Group is a lessee

Operating leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases, including prepayments (net of any incentives received from the lessor) are recognized in the consolidated income statement under the straight-line method over the lease term. The Group’s major kinds of operating leases are leases of machinery, computer equipment, printing equipment, among others.

Finance leases

Leases in which the Group substantially assumes all the risks and rewards of ownership of an asset are classified as finance leases. Each lease payment is allocated between the liability and finance charges to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The corresponding rental obligations, net of finance charges, are included in other payables, short- and long-term in the consolidated statement of financial position. The interest element of the finance cost is charged to the consolidated income statement of over the lease periods to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the useful life of the asset or the lease term.

Dividend distribution

2.29 Dividend distribution

Dividend distribution to the Group shareholders is recognized as a liability in the financial statements in the period in which the dividends are approved.

Significant non-operating items

2.30 Significant non-operating items

Significant non-operating items are separately shown in the financial statements when they are necessary to provide an adequate understanding of the Group’s financial performance. These material items are income or expenses shown separately due to their nature or significant amount.

Reclassified Discontinued Operations from 2018

2.31 Discontinued operations as of December 31, 2017 and December 31, 2018

a) Restatement of the Statement of Income as of December 31, 2017 (was restructured in the 2018 annual report, presented on April 30, 2019)

The consolidated statement of income for the year ended December 31, 2017 included the net gain on the sale of our former subsidiary GMD (S/218.3 million, equivalent to US$64.6 million) under the “Gain from the sale of investments” line item, rather than the “Profit from discontinued operations” line item, in accordance with IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, such amount has been restated in application of IFRS 5 paragraph 33 a).

	2017 Audited			Restatement GMD			Reclassification discontinued operations (*)			2017 Restated and Reclassified
Revenues		6,080,142			—			(2,066,129	)		4,014,013
Operating costs		(5,407,355	)		—			1,895,794			(3,511,561	)
Gross profit (loss)		672,787			—			(170,335	)		502,452
Administrative expenses		(429,181	)		—			106,727			(322,454	)
Other (expenses) income, net		(20,545	)		—			(12,324	)		(32,869	)
Gain (loss) from the sale of investments		274,363			(218,264	)		(21,554	)		34,545
Operating profit (loss)		497,424			(218,264	)		(97,486	)		181,674
Financial expenses		(185,445	)		—			34,668			(150,777	)
Financial income		15,407			—			(1,665	)		13,742
Share of the profit or loss in associates and joint ventures		1,327			—			(854	)		473
Profit (loss) before income tax		328,713			(218,264	)		(65,337	)		45,112
Income tax		(123,037	)		63,940			12,792			(46,305	)
Profit (loss) from continuing operations		205,676			(154,324	)		(52,545	)		(1,193	)
Profit from discontinued operations		3,562			154,324			52,545			210,431
Profit of the year		209,238									209,238
Earnings per share attributable to owners of the Company during the year		0.225									0.225
Earning (loss) per share from continuing operations attributable to owners of the Company during the year		0.220									(0.101	)

(*) Corresponds to financial result from discontinued operations, Stracon GyM S.A., CAM Servicios del Peru S.A., CAM Chile S.A. and Adexus S.A.

b) Reclassified discontinued operations as of December 31, 2018

As a result of the divestment process, the results of discontinued operations are reclassified as follows:

	2018 Audited			Reclassification discontinued operations			2018 Reclassified
Profit for the year		57,415			—			57,415
Other comprehensive income:
Items that will not be reclassified to profit or loss
Remeasurement of actuarial gains and losses, net of tax		16,589			—			16,589
Items that may be subsequently reclassified to profit or loss
Cash flow hedge, net of tax		119			—			119
Foreign currency translation adjustment, net of tax		5,733			—			5,733
Exchange difference from net investment in a foreign operation, net of tax		(8,147	)		—			(8,147	)
		(2,295	)		—			(2,295	)
Other comprehensive income for the year, net of tax		14,294			—			14,294
Total comprehensive income for the year		71,709			—			71,709
Comprehensive income attributable to:
Owners of the Company		(67,548	)		—			(67,548	)
Non-controlling interest		139,257			—			139,257
		71,709			—			71,709
Comprehensive income attributable to owners of the Company:
Continuing operations		(98,942	)		(32,342	)		(131,284	)
Discontinued operations		31,394			32,342			63,736
		(67,548	)		—			(67,548	)

XML

Other Accounts Payable - Additional Information (Detail) S/ in Millions	Dec. 31, 2019 PEN (S/)
Construction contracts 1 [member]
Disclosure Of Other Payables [line items]
Payment obligations to main subcontractors as a consequence of termination of GSP operations	S/ 235

XML

Borrowings - Summary of Present Value of Lease Liability for Right-of-use Asset (Detail) S/ in Thousands	Dec. 31, 2019 PEN (S/)
Disclosure Of Future Minimum Lease Payments [Line Items]
Lease liability for right-of-use asset	S/ 80,216
Maturity Period Less than One Year [member]
Disclosure Of Future Minimum Lease Payments [Line Items]
Lease liability for right-of-use asset	18,246
Maturity Period Greater than One and Less than Five Year [member]
Disclosure Of Future Minimum Lease Payments [Line Items]
Lease liability for right-of-use asset	54,595
Maturity Period Greater than Five Year [member]
Disclosure Of Future Minimum Lease Payments [Line Items]
Lease liability for right-of-use asset	S/ 7,375

XML

Deferred Income Tax - Summary of Movements of Deferred Tax Assets and Liabilities (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance	S/ 350,089	S/ 364,225	S/ 353,839
(Charge) credit to P&L	(206,273)	25,118	42,599
Charge (credit) to equity	(3)	(95)	(16,804)
IFRIC 23 adoption	(986)
Sale of subsidiaries		40,460	12,160
Ending balance	128,185	350,089	364,225
Difference in depreciation rates [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance	74,983	165,851	61,750
(Charge) credit to P&L	9,937	(74,679)	104,101
Sale of subsidiaries			(16,189)
Ending balance	84,920	74,983	165,851
Deferred income [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance	13,574	0
(Charge) credit to P&L	10,571	13,574
Ending balance	24,145	13,574	0
Deferred income tax liability work in process [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance	5,456	2,530	8,242
(Charge) credit to P&L	33,403	2,926	(5,712)
Ending balance	38,859	5,456	2,530
Tax receivable [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance	32,878	32,189	28,867
(Charge) credit to P&L	3,312	689	3,322
Ending balance	36,190	32,878	32,189
Borrowing costs capitalized [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance	15,716	19,945	21,418
(Charge) credit to P&L	(780)	(4,229)	(1,473)
Ending balance	14,936	15,716	19,945
PPA [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance	(1,562)	15,338	27,118
(Charge) credit to P&L	11,385	(11,699)	(11,780)
Sale of subsidiaries			(5,201)
Ending balance	9,823	(1,562)	15,338
Others [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance	13,808	9,357	13,164
(Charge) credit to P&L	18,821	7,828	(3,724)
Sale of subsidiaries		(3,377)	(83)
Ending balance	32,629	13,808	9,357
Deferred Tax Liabilities [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance	154,853	245,210	160,559
(Charge) credit to P&L	86,649	(65,590)	84,734
Sale of subsidiaries		(24,767)	(83)
Ending balance	241,502	154,853	245,210
Provisions [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance	38,366	52,439	105,679
(Charge) credit to P&L	804	702	(12,614)
Charge (credit) to equity			(8,882)
Reclassification			(30,901)
Sale of subsidiaries		(14,775)	(683)
Others			(160)
Ending balance	39,170	38,366	52,439
Accelerated tax depreciation [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance	921	86,651	16,381
(Charge) credit to P&L	7,512	(83,561)	79,637
Sale of subsidiaries		(2,169)	(9,367)
Ending balance	8,433	921	86,651
Tax losses [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance	136,310	144,089	153,083
(Charge) credit to P&L	14,343	25,733	(8,555)
IFRIC 23 adoption	(986)
Sale of subsidiaries		(33,512)	(438)
Others			(1)
Ending balance	149,667	136,310	144,089
Deferred income tax asset work in process [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance	34,005	39,487	17,614
(Charge) credit to P&L	11,715	(5,482)	21,873
Ending balance	45,720	34,005	39,487
Accrual for unpaid vacations [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance	9,009	13,440	12,972
(Charge) credit to P&L	1,842	1,784	2,166
Sale of subsidiaries		(6,215)	(1,697)
Others			(1)
Ending balance	10,851	9,009	13,440
Investments in subsidiaries [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance			608
(Charge) credit to P&L			118
Reclassification			(726)
Provision deterioration [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance	253,607	224,780	172,052
(Charge) credit to P&L	(205,265)	35,289	28,593
Charge (credit) to equity			(7,493)
Reclassification			31,627
Sale of subsidiaries		(6,462)
Others			1
Ending balance	48,342	253,607	224,780
Tax goodwill [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance	18,048	20,413	20,525
(Charge) credit to P&L	(4,526)	(2,365)	(112)
Ending balance	13,522	18,048	20,413
Other [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance	14,676	28,136	15,484
(Charge) credit to P&L	53,329	(14,096)	18,358
Charge (credit) to equity	(3)	(95)	(347)
Sale of subsidiaries		(944)	(236)
Others	(14,020)	1,675	(5,123)
Ending balance	53,982	14,676	28,136
Deferred Tax Asset [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Beginning balance	504,942	609,435	514,398
(Charge) credit to P&L	(120,246)	(41,996)	129,464
Charge (credit) to equity	(3)	(95)	(16,722)
IFRIC 23 adoption	(986)
Sale of subsidiaries		(64,077)	(12,421)
Others	(14,020)	1,675	(5,284)
Ending balance	S/ 369,687	S/ 504,942	S/ 609,435

XML

Events After the Date of the Statement of Financial Position - Additional Information (Detail) - Nonadjusting Events [Member] - Adexus S.A. [member]	Jan. 09, 2020
Disclosure of non-adjusting events after reporting period [line items]
Percentage of favorable vote for reorganization by pledge creditors	80.00%
Percentage of favorable vote for reorganization by unsecured creditors	85.00%
Time period to repay reorganized liabilities	6 years

XML

Other Accounts Payable - Summary of Other Accounts Payable (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure Of Other Payables [line items]
Advances received from customers	S/ 307,839	S/ 496,547
Salaries and other payable	87,869	97,774
Put option liability on Morelco acquisition (Note 32-b)	106,444	103,649
Third-party loans	11,619	11,560
Other taxes payable	104,444	132,775
Acquisition of non-controlling interest (Note 35-a)	22,697	22,963
Guarantee deposits	13,201	15,137
Other accounts payables	70,592	55,865
Other payables	908,406	1,206,779
Advances received from customers, current	270,714	301,868
Salaries and other payable, current	87,869	97,774
Put option liability on Morelco acquisition, current	71,341
Third-party loans, current	9,545	11,560
Other taxes payable, current	84,235	111,444
Acquisition of non-controlling interest (Note 35-a), current	22,697	22,963
Guarantee Deposits, Current	13,201	15,137
Other accounts payables, current	40,078	36,392
Other payables, current	635,305	632,669
Advances received from customers, not current	37,125	194,679
Payables related parties, not current	22,583	21,849
Put option liability on Morelco acquisition (Note 33-b), not current	35,103	103,649
Third-party loans, not current	2,074	0
Other taxes payable, not current	20,209	21,331
Other accounts payables, not current	30,514	19,473
Other payables, not current	273,101	574,110
Consorcio Ductos del Sur payable [member]
Disclosure Of Other Payables [line items]
Payables related parties	148,076	234,978
Payables related parties, not current	148,076	234,978
Consorcio Rio Mantaro [member]
Disclosure Of Other Payables [line items]
Payables related parties	35,625	35,531
Payables related parties, current	S/ 35,625	S/ 35,531

XML

Transactions with Non-controlling Interests - Summary of Contributions of Non-controlling Shareholders (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Non-controlling interests [line items]
Contributions from other subsidiaries		S/ 15,120	S/ 3,202
Increase (decrease) in equity of non controlling parties	S/ (32,996)	(69,337)	(33,197)
Vial y Vives-DSD S.A. [member]
Non-controlling interests [line items]
Contributions received	152	3,399	8,654
Returns of contributions	(33,148)	(87,856)	(45,053)
Increase (decrease) in equity of non controlling parties	S/ (32,996)	S/ (84,457)	S/ (36,399)

XML

Critical Accounting Estimates and Judgements (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Sensitivity Analysis Based on 10% Increase/Decrease in Assumptions of Gross Margin, Discount Rate, Terminal Growth Rate (Details)

At December 31, 2018, and 2019 the Group has performed a sensitivity analysis increasing or decreasing the assumptions of gross margin, discount rate, and revenue and terminal growth rate by a 10%, with all the other variables held constant, as follows:

	Difference between recoverable amount and carrying amounts
	2018					2019
Goodwill
Gross margin		(10	%)	+10	%		(10	%)	+10	%
Engineering and construction		0.51	%	41.12	%		(25.54	%)	(4.25	%)
Electromechanical		(9.73	%)	38.89	%		35.63	%	52.97	%
Discount rate:		(10	%)	+10	%		(10	%)	+10	%
Engineering and construction		39.19	%	6.65	%		(4.30	%)	(23.09	%)
Electromechanical		29.36	%	2.97	%		48.89	%	39.92	%
Terminal growth rate:		(10	%)	+10	%		(10	%)	+10	%
Engineering and construction		18.48	%	23.30	%		(16.31	%)	(13.38	%)
Electromechanical		12.90	%	16.34	%		42.36	%	46.32	%
Trademarks
Revenue growth rate:		(10	%)	+10	%		(10	%)	+10	%
Morelco		75.00	%	116.27	%		22.14	%	60.11	%
Vial y Vives - DSD		27.40	%	55.71	%		110.69	%	72.38	%
Discount rate:		(10	%)	+10	%		(10	%)	+10	%
Morelco		126.00	%	72.33	%		63.02	%	23.56	%
Vial y Vives - DSD		29.54	%	55.99	%		78.72	%	106.64	%
Terminal growth rate:		(10	%)	+10	%		(10	%)	+10	%
Morelco		91.70	%	99.82	%		37.49	%	44.02	%
Vial y Vives - DSD		38.99	%	44.26	%		88.07	%	95.20	%

Summary of Sensitivity Analysis Performed Considering a 10% Increase/Decrease in Group's Gross Margins

As of December 31, 2017, 2018 and 2019, a sensitivity analysis was performed considering a 10% increase/decrease in the Group’s gross margins, as follows:

	2017			2018			2019
Revenues		2,214,108			1,961,100			2,411,880
Gross profit		106,902			32,685			60,317
%		4.83			1.67			2.50
Plus 10%		5.31			1.84			2.75
Increase in profit before income tax		10,667			3,399			6,010
		117,569			36,084			66,327
Less 10%		4.35			1.50			2.25
Decrease in profit before income tax		(10,667	)		(3,399	)		(6,010	)
		96,235			29,286			54,307

XML

Equity

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Equity

23 EQUITY

a) Capital

The General Shareholders’ Meeting held on November 6, 2018, approved a capital increase of up to US$130 million equivalent to 211,864,407 shares at a price of US$0.6136. As of December 31, 2018, during the first stage of the placement and the conclusion of two preferred subscription rounds, a total of 69,380,402 shares were subscribed. Therefore, the Company’s capital is represented by 729,434,192 shares with a par value of S/1.00 each, out of which 660,053,790 are registered in the Public Registry, and 69,380,402 are in the process of registration.    

On April 2, 2019, the Company concluded the capital increase process by completing the subscription of 142,483,663 new common shares, therefore the capital of the company is represented by S/871,917,855, after the end of the private offer and considering the contributions made during the 2 preferential subscription wheels.

As of December 31, 2018, a total of 207,931,660 shares were represented in ADS, equivalent to 41,586,332 ADS at a rate of 5 shares per ADS; and 218,043,480 shares were represented in ADS equivalent to 43,608,696 ADS as of December 31, 2019.

As of December 31, 2019, the Company’s shareholding structure is as follows:

Percentage of individual interest in outstanding capital	Number of shareholders		Total percentage of interest
Up to 1.00		1,725		12.19	%
From 1.01 to 5.00		16		30.98	%
From 5.01 to 10.00		2		18.34	%
Over 10		2		38.49	%
		1,745		100.00	%

At December 31, 2019, the Company’s shares registered a stock price at the end of the year of S/1.70 per share and a trading frequency of 95.24% (S/1.99 per share and a trading frequency of 91.6% at 31 December 2018).

b) Legal reserve

In accordance with the Peruvian General Law of Corporations, the legal reserve of the Company is constituted with the transfer of 10% of the annual profit until reaching an amount equivalent to 20% of the paid-in capital. In the absence of profits or unrestricted reserves, the legal reserve must be applied to the compensation of losses and must be replenished with the profits of subsequent years. This reserve may be capitalized; and its replacement is also mandatory.

c) Voluntary reserve

As of December 31, 2018, and 2019, this S/29.97 million reserve is related to the excess of the legal reserve; this reserve is above the requirement to constitute a reserve until it reaches the equivalent of 20% of the paid-in capital.

d) Share premium

This item includes the excess of total income obtained by shares issued in 2013 compared to their nominal value of S/1,055.5 million and by shares issued in 2018 and 2019 an amount of S/68.2 million and S/138.9 million, respectively.

In addition, this account recognizes the difference between the nominal value and the transaction value for acquisitions of shares in non-controlling interests.

e) Retained earnings

Dividends distributed to shareholders other than domiciled legal entities are subject to the rates of 4.1% (earnings until 2014), 6.8% (2015 and 2016 earnings) and 5.00% (2017 and thereafter) for income tax charged to these shareholders; such tax is withheld and settled by the Company. Dividends for fiscal years 2018 and 2019 were not distributed (Note 33).

XML

Trade Accounts Receivables, Net - Summary of Aging of Trade Accounts Receivable (Detail) - Gross carrying amount [member] - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure of financial assets that are either past due or impaired [line items]
Trade accounts receivable	S/ 918,410	S/ 1,363,874
Current [member]
Disclosure of financial assets that are either past due or impaired [line items]
Trade accounts receivable	802,341	890,100
Not later than one month [member]
Disclosure of financial assets that are either past due or impaired [line items]
Trade accounts receivable	28,216	259,062
Later than one month and not later than six months [member]
Disclosure of financial assets that are either past due or impaired [line items]
Trade accounts receivable	21,490	28,575
Later than six months and not later than one year [member]
Disclosure of financial assets that are either past due or impaired [line items]
Trade accounts receivable	28,327	152,732
Later than one year [member]
Disclosure of financial assets that are either past due or impaired [line items]
Trade accounts receivable	S/ 38,036	S/ 33,405

XML

Bonds

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Bonds

19 BONDS

As of December 31, this item includes:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
GyM Ferrovías S.A. (a)		611,660		618,497		13,422		15,742		598,238		602,755
Norvial S.A. (b)		325,382		305,545		25,745		28,995		299,637		276,550
		937,042		924,042		39,167		44,737		897,875		879,305

a) GyM Ferrovias S.A.

In February 2015, the subsidiary GyM Ferrovías S.A. issue corporate bonds under Regulation S of the United States of America. The issuance was made in VAC soles (adjusted for the Constant Update Value) for an amount of S/629 million. The bonds expire in November 2039 and accrue interest at a rate of 4.75% (plus the VAC adjustment), present a risk rating of AA + (local scale) granted by Support & International Associates Risk Classifier. As of December 31, 2019, an accumulated amortization amounting to S/79 million (S/67.7 million as of December 31, 2018) has been made.

As of December 31, 2019, the balance includes accrued interest payable and VAC adjustments for S/86.8 million (S/72 million as of December 31, 2018).

As of December 31, 2017, 2018 and 2019, the movement of this account is as follows:

	2017			2018			2019
Balance at January, 1		604,031			603,657			611,660
Amortization		(19,141	)		(10,178	)		(11,330	)
Accrued interest		49,132			48,130			48,253
Interest paid		(30,365	)		(29,949	)		(30,086	)
Balance at December, 31		603,657			611,660			618,497

As part of the bond structuring process, GyM Ferrovías S.A. pledged to report and verify compliance with the following, measured according to their individual financial statements (covenants):

• Debt service coverage ratio not less than 1.2 times;

• Maintain a minimum balance in the trust equal to one-quarter of operating and maintenance costs (including VAT);

• Maintain a constant balance in the minimum trust equal to the following two coupons according to the bond schedule.

On August 23, 2017, GyM Ferrovias S.A. and Line One CPAO Purchaser LLC signed the purchase-sale contract and assignment of collection rights for the “Annual Payment for Complementary Investment (PAO Complementary)” derived from the Concession Contract for an amount equivalent to US$316 million. The last payment for the sale of the CPAO was mad on December 10, 2019.

On August 23, 2017, GyM Ferrovias S.A. as Borrower, Mizuho Bank, Ltd., and Sumitomo Mitsui Banking Corporation as Lenders and Mizuho Bank, Ltd. as Administrative Agent signed a Working Capital loan agreement for an amount equivalent to US$80 million to partially finance the Lima Metro Line 1 Expansion Project. In May 2019, the Working Capital loan was fully prepaid and the Working Capital Loan Agreement terminated. (As of December 31, 2018, the account payable amounted to US$62 million).

b) Norvial S.A.

Between 2015 and 2016, the subsidiary, Norvial S.A., issued the First Corporate Bond Program on the Lima Stock Exchange for S/365 million. The rating companies Equilibrium Risk and Apoyo & Asociados Internacionales gave the rating of AA to this debt instrument.

The purpose of the awarded funds was to finance the construction works of the Second Stage of the Road Network No. 5 and the financing of the VAT linked to the execution of the expenses of the Project.

As of December 31, 2017, 2018, and 2019, the movement in this account is as follows:

	2017			2018			2019
Balance at January, 1		363,684			343,910			325,382
Amortization		(20,010	)		(18,736	)		(20,005	)
Accrued interest		2,987			24,170			23,482
Capitalized interest		26,011			3,361			2,725
Interest paid		(28,762	)		(27,323	)		(26,039	)
Balance at December, 31		343,910			325,382			305,545

As part of the bond structuring process, Norvial S.A. undertook to periodically report and verify compliance with the following covenants:

• Debt service coverage ratio not less than 1.3 times;

• Proforma leverage ratio less than 4 times.

The fair value of both obligations at December 31, 2019 amounts to S/1,014 million (at December 31, 2018, amounts to S/1,037 million), and is based on discounted cash flows using rates between 4.32% and 7.59% (between 4.09% and 5.45% at December 31, 2018) corresponding to level 2 of the fair value hierarchy.

As of December 31, 2018, and 2019, the Company has complied with the covenants of both types of bonds.

XML

Financial Instruments - Summary of Credit Quality of Customers (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Trade receivables [member]
Disclosure of internal credit grades [line items]
Credit exposure	S/ 1,574,939	S/ 2,027,895
Trade receivables [member] | New customers/related parties (less than 6 months) [member]
Disclosure of internal credit grades [line items]
Credit exposure	58,999	302,369
Trade receivables [member] | Existing customers/related parties (with more than 6 months of trade relationship) with no previous default history [member]
Disclosure of internal credit grades [line items]
Credit exposure	1,373,424	1,579,400
Trade receivables [member] | Existing customers/related parties (with more than 6 months of trade relationship) with previous default history [member]
Disclosure of internal credit grades [line items]
Credit exposure	142,516	146,126
Receivable from related parties [member] | Existing customers/related parties (with more than 6 months of trade relationship) with no previous default history [member]
Disclosure of internal credit grades [line items]
Credit exposure	S/ 583,599	S/ 813,129

XML

Cash and Cash Equivalents - Summary of Time Deposits from Subsidiaries (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Time Deposits [line items]
Time deposits	S/ 166,174	S/ 148,365
Banco de Crdito del Peru [member] | GyM Ferrovias S.A. [member]
Time Deposits [line items]
Time deposits	S/ 32,300	32,000
Time deposit interest rate	2.70%
Banco de Crdito del Peru [member] | GyM S.A. [member]
Time Deposits [line items]
Time deposits	S/ 28,213	1,906
Time deposit interest rate	2.40%
Banco de Crdito del Peru [member] | Survial S.A. [member]
Time Deposits [line items]
Time deposits	S/ 15,400
Time deposit interest rate	2.85%
Banco de Crdito del Peru [member] | GMI S.A. [Member]
Time Deposits [line items]
Time deposits	S/ 9,993
Time deposit interest rate	2.52%
Banco de Crdito del Peru [member] | Grana y Montero S.A.A. [member]
Time Deposits [line items]
Time deposits	S/ 5,312	110,281
Time deposit interest rate	2.40%
Banco de Crdito del Peru [member] | Norvial S.A. [member]
Time Deposits [line items]
Time deposits	S/ 4,763
Time deposit interest rate	2.85%
Banco de Crdito del Peru [member] | Concesion Canchaque S.A.C. [Member]
Time Deposits [line items]
Time deposits	S/ 662
Time deposit interest rate	2.85%
Banco de Crdito del Peru [member] | Concesionaria La Chira S.A. [member]
Time Deposits [line items]
Time deposits		4,170
Time deposit interest rate	2.50%
Banco de Crdito del Peru [member] | GMP S.A. [member]
Time Deposits [line items]
Time deposits		7
Time deposit interest rate	2.50%
Banco de Crdito del Peru [member] | Viva GyM S.A. [member]
Time Deposits [line items]
Time deposits		S/ 1
Time deposit interest rate	2.50%
Banco Continental [member] | GyM Ferrovias S.A. [member]
Time Deposits [line items]
Time deposits	S/ 69,531
Time deposit interest rate	1.15%

XML

Investments in Associates and Joint Ventures

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Investments in Associates and Joint Ventures

15 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

At December 31, this account comprises:

	2018		2019
Associates		250,282		28,875
Joint ventures		7,483		8,160
		257,765		37,035

The amounts recognized in the income statement as the value of the equity interest are as follows:

	2018			2019
Associates		(5,308	)		(220,993	)
Joint ventures		1,599			2,219
		(3,709	)		(218,774	)

a) Investment in associates

Set out in the table below are the associates of the Group at December 31, 2018, and 2019 the associates listed below have share capital solely consisting of common shares, which are held directly by the Group. None of the associates are listed companies; therefore, there is no quoted market price available for their shares.

							Carrying amount
	Class		Interest in capital				At December 31,
Entity	of share		2018		2019		2018		2019
			%		%
Gasoducto Sur Peruano S.A. (*)		Common		21.49		21.49		218,276		—
Concesionaria Chavimochic S.A.C.		Common		26.50		26.50		20,524		18,320
Peru Piping Spools S.A.C.		Common		33.33		33.33		5,102		4,166
Obratres S.A.C.		Common		37.50		37.50		3,758		3,756
Inversiones Majes S.A.		Common		9.59		9.59		1,846		2,306
Others								776		327
								250,282		28,875

(*) Mainly corresponds to an write-off of the investment in Gasoducto Sur Peruano S.A. as a whole.

The movement of the investments in associates is as follows:

	2017			2018			2019
Opening balance		286,403			250,053			250,282
Contributions received		2,116			5,616			—
Dividends received		(259	)		—			—
Equity interest in results		(5,566	)		(5,308	)		(220,993	)
Decrease in capital		(111	)		(30	)		—
Disposal of investments		(32,223	)		—			—
Impairment of investment		—			—			(374	)
Conversion adjustment		42			(49	)		(40	)
Discontinued Operations		(349	)
Final balance		250,053			250,282			28,875

The most significant associates are described as follows:

i) Gasoducto Sur Peruano S.A.

In November 2015, the group acquired a 20% interest in Gasoducto Sur Peruano S.A. (hereinafter “GSP”) and obtained a 29% interest in Consorcio Constructor Ductos del Sur (hereinafter “CCDS”) through its subsidiary GyM S.A. GSP signed on July 22, 2014, a concession contract with the Peruvian Government to build, operate and maintain the pipelines transportation system of natural gas to meet the demand of cities in the south of Peru (hereinafter, the “Concession Contract”). Additionally, GSP signed an engineering, procurement, and construction contract with CCDS. The Group made an investment of US$242.5 million (S/819 million) and was required to assume 20% of the performance guarantee established in the concession contract for US$262.5 million (equivalent to S/887 million) and 21.49% of the guarantee for a bridge loan obtained by GSP of US$600 million (equivalent to S/2,027 million).

Early termination of the Concession Agreement

On January 24, 2017 the Ministry of Energy and Mines (hereinafter “MEM”) notified the early termination of the Concession Contract under its clause 6.7 based on GSP’s failure to provide evidence of the project’s financial closing within the contractual deadline and proceeded to the immediate enforcement of the performance guarantee. This situation generated the enforcement of the guarantees provided by the Company for US$52.5 million (S/176.4 million nominal value) and US$129 million (S/433.3 million nominal value) to secure GSP’s obligation with its lenders under a bridge loan granted to it. Under the Concession Agreement, the guarantees were paid by the Company on behalf of GSP, therefore the Company recognized a right to collect from GSP an amount equal to US$181.5 million (S/613.3 million nominal value) that was recorded in 2016 as accounts receivable from related parties.

On October 11, 2017, GSP and MEM entered into an agreement to deliver the concession assets pursuant to the Concession Agreement. These assets included all the works, equipment, facilities and engineering studies needed for the development of the project.

After the termination of the Concession Contract, the Peruvian Government should have appointed a recognized international audit firm to calculate the net book value of the concession assets (hereinafter “VCN”) and conducted up to three public auctions of the GSP concession pursuant to clause 20 of the Concession Agreement. However, as of the date hereof, the Peruvian Government continues to be in breach of such contractual obligation. An independent audit firm engaged by GSP calculated the VCN to equal US$2,602 million as of December 31, 2016.

On December 4, 2017, GSP entered into a bankruptcy proceeding before the National Institute for the Defense of Competition and Intellectual Protection of Peru. The Group registered a claim for accounts receivable for US$0.4 million (S/1.4 million) and additional accounts receivable of US$169.3 million (S/572.1 million) that is held in trust in benefit of the Company’s creditors. The process is in the debt recognition stage to determine the parties who will be entitled to participate in the Creditors’ Assembly to be convoked under the mentioned bankruptcy proceeding.

The fair value of the investment in GSP, as Group associate, is based on the amount of the VCN, taking into consideration the payments anticipated in the insolvency proceedings, the subordination contracts and the loan assignment agreements entered into by the Company and its partners in the project. Based on management’s estimate of such payments, an impairment of the investment value for US$220 million (S/739 million), corresponding to the year end 2019 US$65 million (S/218 million). In addition, Management has applied, in the consolidated financial statements of the company, an impairment of US$81.5 million (S/276 million) to the long-term account receivable from GSP, and also discount under the amortized cost for US$17 million (S/58 million). In addition, write-off of US$54 million (S/180 million) was made over the deferred tax asset. These effects amounted to US$163.5 million (S/552 million) before taxes recorded in the income statement for the year ended December 31, 2019 and US$54 million (S/180 million) related to income tax expense.

In the opinion of our internal and external legal advisors, any proceeds received by GSP from the Peruvian Government derived from the former’s obligation to reimburse the VCN of the concession assets would not be subject to retention under Law 30737 since this payment does not include a net profit margin, nor does it correspond to the sale of assets.

On December 21, 2018, the Company. submitted to the Peruvian Government a request for direct negotiations demanding the payment of the VCN in favor of GSP therefore, commencing the cool off period under the Concession Contract. This request is based on the right that creditors have under article 1219 of the Peruvian Civil Code to initiate actions against its debtor’s debtors that the former to collect a credit that would allow the payment of the outstanding debt.

Upon the conclusion of the contractual cool off period, the Company filed on October 18, 2019 a request for arbitration before CIADI. The Company withdrew its request for arbitration on December 27 of the same year the preliminary plea bargain agreement entered on the same date by the Company with the Prosecutor and the Ad hoc State Counsel (Note 1).

Such withdrawal does not imply the loss of the Company’s right of collection against GSP nor does it restrict, limit or obstruct the possibility that GSP has of exercising its rights against the Government in the future.

ii) Concesionaria Chavimochic S.A.C.

Concesionaria Chavimochic S.A.C. was awarded the concession to develop and operate the Chavimochic irrigation project for 25 years to: a) design and construction the third-phase of the Chavimochic irrigation project in the province of La Libertad; b) operation and maintenance of works; and c) water supply to the project users. Construction activities started in 2015 and the total investment amounts US$647 million.

The civil works of the third stage of the Chavimochic Irrigation Project were structured in two phases. To date, the works of the first phase (Palo Redondo Dam) are 70% completed. However, at the beginning of 2017, the procedure for early termination of the Concession Contract was initiated due to the breach of contract by the government, and all activities were suspended in December 2017. Not having reached an agreement, the arbitration process was initiated subject to UNCITRAL rules, and the Arbitral Tribunal was installed. The Company and its legal advisors believe that the ruling will be favorable and the corresponding investment will be recovered.

The following table shows the financial information of the principal associates:

Summarized financial information for associates 

Gaseoducto Sur Peruano S.A. do not have activity in 2018 and 2019.

	Gasoducto Sur Peruano S.A.			Concesionaria Chavimochic S.A.C.
	At December, 31			At December, 31
Entity	2018			2018			2019
	(Liquidation base)
Current
Assets		7,006,473			66,052			55,586
Liabilities		(5,294,214	)		(2,183	)		(1,521	)
Non-current
Assets		—			13,580			16,007
Liabilities		—			—			—
Net assets		1,712,259			77,449			70,072

	Concesionaria Chavimochic S.A.C.
Entity	2018			2019
Administrative expenses		(8,455	)		(11,916	)
Loss of the year before tax		(8,455	)		(11,916	)
Income tax		2,543			3,600
Loss of the year		(5,912	)		(8,316	)
Total comprehensive loss		(5,912	)		(8,316	)

b) Investment in Joint Ventures

Set out below are the joint ventures of the Group as of December 31:

							Carrying amount
	Class		Interest in capital				At December 31,
Entity	of share		2018		2019		2018		2019
			%		%
Logistica Quimicos del Sur S.A.C.		Common		50.00		50.00		7,230		8,006
Constructora SK-VyV Ltda.		Common		50.00		50.00		34		29
Others				—		—		219		125
								7,483		8,160

Logistica Quimicos del Sur S.A.C. operates the Matarani chemical terminal.

The movement of the investments in joint ventures was as follows:

	2017			2018			2019
Opening balance		103,356			18,618			7,483
Equity interest in results		6,039			1,599			2,219
Disposal of Investment		(88,556	)		(10,112	)		—
Dividends received		(3,758	)		(1,823	)		(1,517	)
Conversion adjustment		334			79			(14	)
Impairment of investment		—			(878	)		(11	)
Discontinued Operations		1,203			—			—
Final balance		18,618			7,483			8,160

The following significant movements were carried out:

• The Group received dividends in 2019 from Logística Quimicos del Sur S.A. for S/1.5 million (S/1.8 million in 2018 and S/2.8 million in 2017).

• On April 24, 2017, the Company signed a purchase-sale agreement for their total capital stock (representing 51%) held in their joint venture with Compañia Operadora de Gas del Amazonas S.A.C. (COGA). The selling price was agreed at US$21.5 million (equivalent to S/69.8 million), which was fully paid.

The following table shows the financial information of the principal joint ventures:

Summarized financial information for joint ventures

	At December, 31
Logistica Quimicos del Sur S.A.C.	2018			2019
Current
Cash and cash equivalents		1,520			2,131
Other current assets		1,549			2,416
Total current assets		3,069			4,547
Other current liabilities		(3,513	)		(4,381	)
Total current liabilities		(3,513	)		(4,381	)
Non-current
Total non-current assets		37,349			37,620
Total non-current liabilities		(22,445	)		(21,773	)
Net assets		14,460			16,013
Revenue		11,399			12,622
Depreciation and amortization		(2,313	)		(2,505	)
Interest expense		(668	)		(644	)
Profit from continuing operations		4,698			6,500
Income tax expense		(1,482	)		(1,913	)
Profit from continuing operations after income tax		3,216			4,587
Other comprehensive income		—			—
Total comprehensive income		3,216			4,587

XML

Inventories - Schedule of Inventories of Land (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure of inventories [line items]
Land	S/ 183,218	S/ 230,689
Lurin [member]
Disclosure of inventories [line items]
Land	71,902	72,080
San Isidro [member]
Disclosure of inventories [line items]
Land	51,285	49,664
San Miguel [member]
Disclosure of inventories [line items]
Land		28,811
Nuevo Chimbote [member]
Disclosure of inventories [line items]
Land	17,457	17,262
Barranco [member]
Disclosure of inventories [line items]
Land	14,202	13,585
Huancayo [member]
Disclosure of inventories [line items]
Land		8,282
Piura [member]
Disclosure of inventories [line items]
Land	11,805	8,105
Carabayllo IIl [member]
Disclosure of inventories [line items]
Land	S/ 16,567	14,941
Others [member]
Disclosure of inventories [line items]
Land		S/ 8,752

XML

Other Accounts Receivable - Schedule of Tax Credit Related to VAT on Subsidiaries (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Other Accounts Receivable [line items]
Value added tax receivables	S/ 45,910	S/ 105,238
Current value added tax receivables	31,646	79,076
Non-current value added tax receivables	14,264	26,162
GyM S.A. [member]
Other Accounts Receivable [line items]
Value added tax receivables	12,963	39,183
Current value added tax receivables	12,963	38,653
Non-current value added tax receivables		530
GyM Ferrovias S.A. [member]
Other Accounts Receivable [line items]
Value added tax receivables	11,970	25,453
Current value added tax receivables	11,970	25,453
Grana Y Montero S.A.A. [member]
Other Accounts Receivable [line items]
Value added tax receivables		9,821
Current value added tax receivables		9,821
Concar S.A. [member]
Other Accounts Receivable [line items]
Value added tax receivables	1,653	2,382
Current value added tax receivables	1,653	2,382
GMI S.A. [member]
Other Accounts Receivable [line items]
Value added tax receivables	1,513	589
Current value added tax receivables	1,513	589
Survial S.A. [member]
Other Accounts Receivable [line items]
Value added tax receivables	1,817
Current value added tax receivables	1,817
Viva GyM S.A. [member]
Other Accounts Receivable [line items]
Value added tax receivables	6,874	7,255
Current value added tax receivables	513	511
Non-current value added tax receivables	6,361	6,744
Negocias del Gas S.A. [member]
Other Accounts Receivable [line items]
Value added tax receivables		8,411
Non-current value added tax receivables		8,411
GMP S.A. [member]
Other Accounts Receivable [line items]
Value added tax receivables	396	456
Current value added tax receivables	396	456
Norvial S.A. [member]
Other Accounts Receivable [line items]
Value added tax receivables		1,997
Non-current value added tax receivables		1,997
Concesionaria Vesur S.A. [member]
Other Accounts Receivable [line items]
Value added tax receivables		6,074
Current value added tax receivables		1,015
Non-current value added tax receivables		5,059
Other [member]
Other Accounts Receivable [line items]
Value added tax receivables	8,724	3,617
Current value added tax receivables	821	196
Non-current value added tax receivables	S/ 7,903	S/ 3,421

XML

Deferred Income Tax

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Deferred Income Tax

24 DEFERRED INCOME TAX

Deferred income tax is classified by its estimated reversal term as follows:

	At December 31,
	2018			2019
Deferred income tax asset:
Reversal expected in the following twelve months		48,889			37,927
Reversal expected after twelve months		376,547			202,992
Total deferred tax asset		425,436			240,919
Deferred income tax liability:
Reversal expected in the following twelve months		(9,067	)		(19,791	)
Reversal expected after twelve months		(66,280	)		(92,943	)
Total deferred tax liability		(75,347	)		(112,734	)
Deferred income tax asset, net		350,089			128,185

The gross movement of the deferred income tax item is as follows:

	At December 31,
	2017			2018			2019
Opening balance		353,839			364,225			350,089
Debit (credit) to income statement (Note 29)		42,599			25,118			(206,273	)
Adjustment for changes in rates of income tax		1,951			(1,524	)		(622	)
Sale of a subsidiary		(12,160	)		(40,460	)		—
IFRIC 23 adoption		—			—			(986	)
Debit (credit) to equity		(16,804	)		(95	)		(3	)
Other movements		(5,200	)		2,825			(14,020	)
Final balance		364,225			350,089			128,185

The movement in deferred tax assets and liabilities in the year, without considering the offsetting of balances, is as follows:

Deferred income tax liabilities	Difference in depreciation rates			Deferred income		Work in process			Tax receivable		Borrowing costs capitalized			Purchase price allocation			Others			Total
At January 1, 2017		61,750			—		8,242			28,867		21,418			27,118			13,164			160,559
(Charge) credit to P&L		104,101			—		(5,712	)		3,322		(1,473	)		(11,780	)		(3,724	)		84,734
Sale of subsidiary		—			—		—			—		—			—			(83	)		(83	)
At December 31, 2017		165,851			—		2,530			32,189		19,945			15,338			9,357			245,210
(Charge) credit to P&L		(74,679	)		13,574		2,926			689		(4,229	)		(11,699	)		7,828			(65,590	)
Sale of subsidiary		(16,189	)		—		—			—		—			(5,201	)		(3,377	)		(24,767	)
At December 31, 2018		74,983			13,574		5,456			32,878		15,716			(1,562	)		13,808			154,853
(Charge) credit to P&L		9,937			10,571		33,403			3,312		(780	)		11,385			18,821			86,649
At December 31, 2019		84,920			24,145		38,859			36,190		14,936			9,823			32,629			241,502

Deferred income tax assets	Provisions			Accelerated tax depreciation			Tax losses			Work in process			Accrual for unpaid vacations			Investments in subsidiaries			Impairment			Tax Goodwill			Others			Total
At January 1, 2017		105,679			16,381			153,083			17,614			12,972			608			172,052			20,525			15,484			514,398
Charge (credit) to P&L		(12,614	)		79,637			(8,555	)		21,873			2,166			118			28,593			(112	)		18,358			129,464
Charge (credit) to equity		(8,882	)		—			—			—			—			—			(7,493	)		—			(347	)		(16,722	)
Reclassification		(30,901	)		—			—			—			—			(726	)		31,627			—			—			—
Sale of subsidiary		(683	)		(9,367	)		(438	)		—			(1,697	)		—			—			—			(236	)		(12,421	)
Others		(160	)		—			(1	)		—			(1	)		—			1			—			(5,123	)		(5,284	)
At December 31, 2017		52,439			86,651			144,089			39,487			13,440			—			224,780			20,413			28,136			609,435
Charge (credit) to P&L		702			(83,561	)		25,733			(5,482	)		1,784			—			35,289			(2,365	)		(14,096	)		(41,996	)
Charge (credit) to equity		—			—			—			—			—			—			—			—			(95	)		(95	)
Sale of subsidiary		(14,775	)		(2,169	)		(33,512	)		—			(6,215	)		—			(6,462	)		—			(944	)		(64,077	)
Others		—			—			—			—			—			—			—			—			1,675			1,675
At December 31, 2018		38,366			921			136,310			34,005			9,009			—			253,607			18,048			14,676			504,942
Charge (credit) to P&L		804			7,512			14,343			11,715			1,842			—			(205,265	)		(4,526	)		53,329			(120,246	)
Charge (credit) to equity		—			—			—			—			—			—			—			—			(3	)		(3	)
IFRIC 23 adoption		—			—			(986	)		—			—			—			—			—			—			(986	)
Others		—			—			—			—			—			—			—			—			(14,020	)		(14,020	)
At December 31, 2019		39,170			8,433			149,667			45,720			10,851			—			48,342			13,522			53,982			369,687

As of December 31, 2019, the total tax loss amounts to S/517.3 million and is composed as follows:

	Tax		Tax loss aplication		Application						Statute of
	loss		method		2020		2021		Forward		limitations
GyM S.A.		328,946		B		23,985		13,270		291,691
Vial y Vives-DSD S.A.		115,027		N/A		71,010		6,018		37,999
Viva GyM S.A.		21,530		A		16,917		4,613		—		2022
Graña y Montero S.A.A.		17,875		A		—		—		17,875		2022
TGNCA S.A.C.		15,989		B		—		—		15,989
Morelco S.A.S.		5,650		N/A		5,650		—		—
GMP S.A.		4,869		A		4,869		—		—		2021
GyM Chile S.p.A.		4,052		N/A		—		—		4,052
Survial S.A.		2,053		A		1,437		616		—		2023
Incolur DSD		1,278		N/A		—		—		1,278
Others		47				47		—		—
		517,316				123,915		24,517		368,884

According to Peruvian legislation, there are two ways to compensate for tax losses:

1. System A, it allows offseting offset the tax loss in future years up to the following four (4) years from the date the loss is incurred.

2. System B. The tax loss may be offset in future years up to 50% of the net rent of each year. This option does not consider a statute of limitations.

The taxable goodwill relates to the tax credit generated in the reorganization of the Chilean subsidiaries in 2014, in accordance with such legislation. In 2016, the arbitration related to the Collahuasi project was closed, and an additional payment to the sellers of the Chilean subsidiary was determined, which originated the increase of this temporary item.

Deferred income corresponds to income that, according to Colombian tax regulations, is not recognized as such for tax purposes until certain requirements are met.

XML

Segment Reporting - Disclosure of Detailed Information about EBITDA for Each Segment (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Schedule Of Breakdown By Operating Segments [line items]
EBITDA	S/ (159,002)	S/ 557,299	S/ 572,303
Engineering and Construction [member]
Schedule Of Breakdown By Operating Segments [line items]
EBITDA	2,885	19,243	119,987
Infrastructure [member]
Schedule Of Breakdown By Operating Segments [line items]
EBITDA	355,296	411,502	300,935
Real estate [member]
Schedule Of Breakdown By Operating Segments [line items]
EBITDA	76,239	240,991	177,286
Parent company operations [member]
Schedule Of Breakdown By Operating Segments [line items]
EBITDA	(1,077,259)	(27,803)	125,938
Elimination of intersegment amounts [member]
Schedule Of Breakdown By Operating Segments [line items]
EBITDA	S/ 483,837	S/ (86,634)	S/ (151,843)

XML

Interests in Other Entities - Summary of Group's Public Services Concessions (Detail) S/ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2019 PEN (S/)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Survial S.A. [member]
Disclosure of detailed information about service concession arrangements [line items]
Description	This company operates and maintains a 750 km road from the San Juan de Marcona port to Urcos, Peru, which is connected to an interoceanic road. The road has five toll stations and three weigh stations.
Estimated investment		$ 99
Consideration	Transaction secured by the Peruvian Government involving from annual payments for the maintenance and operation of the road, which is in charge of the Peruvian Ministry of Transport and Communications (MTC).
Ordinary shares held	99.90%	99.90%
Accounting model	Financial asset
Concesin Canchaque S.A. [member]
Disclosure of detailed information about service concession arrangements [line items]
Description	This company operates and periodically maintains a 78 km road which connects the towns of Buenos Aires and Canchaque, in Peru. The road has one toll station.
Estimated investment		$ 31	$ 29
Consideration	Transaction secured by the Peruvian Government regardless the traffic volume. Revenue is secured by an annual minimum amount of US$0.3 million.
Ordinary shares held	99.96%	99.96%
Accounting model	Financial asset
La Chira S.A. [member]
Disclosure of detailed information about service concession arrangements [line items]
Description	Designing, financing, constructing, operating and maintaining project called “Planta de Tratamiento de Aguas Residuales y Emisario Submarino La Chira”. The Project will treat approximately 25% of wastewaters in Lima.
Estimated investment | S/	S/ 250
Consideration	Transaction secured by the Peruvian Government consisting of monthly and quarterly payments settled by Sedapal´s collection trust.
Ordinary shares held	50.00%	50.00%
Accounting model	Financial asset
GyM Ferrovias S.A. [member]
Disclosure of detailed information about service concession arrangements [line items]
Description	Concession for the operation of Line 1 of Lima Metro, Peru’s only urban railway system in Lima city, which includes (i) operation and maintenance of the existing trains (24 initial investment trains and 20 additional trains), (ii) operation and maintenance of the railway system (railway and infrastructure).
Estimated investment | S/	S/ 642
Consideration	Transaction secured by the Peruvian Government involving a quarterly payment received from MTC based on km travelled per train.
Ordinary shares held	75.00%	75.00%
Accounting model	Financial asset
Norvial S.A. [member]
Disclosure of detailed information about service concession arrangements [line items]
Description	The Company operates and maintains the highway that connects Lima to the northwest of Peru. This 183 km road known as Red Vial 5 runs from the cities of Ancon to Pativilca and has three toll stations.
Estimated investment		$ 187	$ 152
Consideration	From users (self-financed concession; revenue is derived from collection of tolls).
Ordinary shares held	67.00%	67.00%
Accounting model	Intangible
Via Expresa Sur S.A. [member]
Disclosure of detailed information about service concession arrangements [line items]
Description	The Company obtained the concession for designing, financing, building, operating and maintaining the infrastructure associated with the Via Expresa Sur Project. This project involves the second stage expansion of the Via Expresa - Paseo de la Republica,between Republica de Panama Avenue and and Panamericana highway.
Estimated investment		$ 197
Consideration	The contract gives the right of collection from users; however the Peruvian Government shall pay the difference when the operating revenue obtained is below US$18 million during the first two years and US$19.7 million from the third year to the fifteenth year of the effective period of the financing, with a ceiling of US$10 million. In June 2017, the contract was suspended temporarily for one year by agreement between the Concessionaire and the grantor. The suspension was extended until June 2020.
Ordinary shares held	99.98%	99.98%
Accounting model	Bifurcated

XML

Other Income and Expenses, Net

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Other Income and Expenses, Net

28 OTHER INCOME AND EXPENSES, NET

For the years ended December 31, these items include the following:

	2017			2018			2019
Other income:
Profit from Mizuho Agreement (a)		—			—			89,688
Recovery of provisions and accounting impairments		—			—			23,279
Trademarks revaluation		—			—			20,676
Supplier debt forgiveness		—			—			19,026
Sale of fixed assets		93,013			26,007			12,748
Sale of investments		—			13,475			—
Present value of the liability from put option		79			6,122			—
Others		6,466			12,815			14,368
		99,558			58,419			179,785
Other expenditures:
Asset impairment (b)		—			—			296,581
Civil repair to the Peruvian Government (c)		—			73,500			69,150
Legal litigation (class action) (Note 22)		—			—			49,754
Impairment of goodwill and trademarks (Note 17 a)		49,608			—			33,089
Net cost of fixed assets disposal		78,378			36,931			21,061
Others		4,441			9,323			36,904
		132,427			119,754			506,539
		(32,869	)		(61,335	)		(326,754	)

(a) Corresponds to the refinancing agreement linked to the contract signed between GyM Ferrrovias S.A. and Mitzuho Bank Ltd. where the Company acted as an endorsement of the transaction. Under the contract, a bond letter was issued with Mitzuho Bank Ltd. for it to be covered with a financial derivative. The contract further indicated that in the event that the bank refinanced the debt, the Company received 70% of the gains obtained.

(b) Mainly corresponds to a provision for impairment of accounts receivable from GSP for S/276 million (Note 15 a) and the subsidiary Promotora Larco Mar S.A. recognized an impairment on work in progress balances for S/18 million.

(c) The Company increased the provision for civil reparation in S/69 million (Note 22).

XML

Segment Reporting - Disclosure of Detailed Information About Segments by Geographical Area (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of geographical areas [line items]
Revenue	S/ 4,085,004	S/ 3,899,462	S/ 4,014,013
Non-current assets	3,333,795	4,197,142	4,775,724
Peru [member]
Disclosure of geographical areas [line items]
Revenue	3,454,959	3,347,540	3,589,048
Non-current assets	3,063,146	3,896,920	4,164,342
Chile [member]
Disclosure of geographical areas [line items]
Revenue	388,284	226,891	371,986
Non-current assets	146,891	142,383	407,152
Colombia [member]
Disclosure of geographical areas [line items]
Revenue	241,761	325,031	50,829
Non-current assets	S/ 123,758	S/ 157,839	203,203
Guyana [member]
Disclosure of geographical areas [line items]
Non-current assets			878
Bolivia [member]
Disclosure of geographical areas [line items]
Revenue			2,150
Non-current assets			S/ 149

XML

Business Combinations

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Business Combinations

32 BUSINESS COMBINATIONS

a) Morelco S.A.S. acquisition

On December 23, 2014, the Company acquired control through its subsidiary GyM S.A., with the purchase of 70% of its shares representing the capital stock. Morelco S.A.S. is an entity domiciled in Colombia, whose principal economic activity is the provision of construction and assembly services. This acquisition forms part of the Group’s expansion plans in markets with high growth potential such as Colombia and in attractive industries such as mining and energy.

At December 31, 2014, the Company determined goodwill on this acquisition based on an estimated purchase price of US$93.7 million (equivalent to S/277.1 million) which included cash payments made of US$78.5 million (S/237.5 million, approximately) and estimated payables of US$15.1 million (equivalent to S/45.7 million), which according to what was agreed between the parties, would be defined after the review of the balance sheet of the acquired entity mainly referring to working capital, cash and financial debt and the determination of the definitive value of the contracted works pending to execute (backlog) of the acquired business. The estimated purchase price was distributed among the provisional fair values of the assets acquired, and liabilities assumed.

As a result of this distribution, a goodwill of US$36.1 million (equivalent to S/105.8 million) was determined.

Non-controlling interest put and call options

In accordance with the shareholders’ agreement entered into for the purchase of Morelco, the Company signed put and call option contract on 30% of the shares of Morelco held by the non-controlling shareholders. Through this contract, the non-controlling shareholders obtain a right to sell their shares within the term and amount established in the contract (put options). The period for exercising the option begins on completion of the second year of the purchase and expires in the tenth year. The exercise price is based on a multiple of EBITDA less net financial debt and until the months 51 and 63 from the date of the agreement, a minimum value is set based on the price per share that the Company paid to acquire 70% of Morelco shares.

The Company obtains the right to purchase the same shares for a period of 10 years and at a determined price similar to that of the aforementioned put options, except that the minimum value applies to the entire term of the option (call options).

Into IFRS framework, the put option represents an obligation for the Company to purchase shares of the non-controlling interest and, consequently, the Group recognizes a liability measured by the fair value of that option, as of December 31, 2019, the value of the liability amounts to S/106.4 million (as of December 31, 2018, it was S/103.7 million). Because the Group concluded that as a result of this contract, did not acquire the significant risks and rewards inherent to the stock option package, the initial recognition of this liability was charged to an equity account of the controlling stockholders, under the heading of other reserves (Note 21). 

On April 30, 2019, an addenda No. 01 was signed to the shareholders Agreement, which modifies:

Section 7.3 sale option in favor of the Initial shareholder, for the following:

As of December 31, 2020 and for a term of six (6) months, the initial shareholder may exercise a selling option, only once, for a number of shares held by the Initial shareholder equivalent to sixty-six point sixty-seven percent (66.67%) of the shares held by the Initial shareholder at the time of exercising the Low sale option this sub-clause (sale option 1). As of December 31, 2022 and for a term of six (6) months, the Initial shareholder may at any time exercise a sale option, for one time only, for the totality and not less than the totality of the shares held by the Initial shareholder at the time of exercising the sale option under this subclause, notwithstanding the foregoing, if GyM S.A. does not fulfill its obligations subject to the option of sale 1 within the period indicated in paragraph b of this Section 7.3, the term established for the exercise of option 2 is accelerated and may be exercised by the Initial shareholder at any time after the day following expiration of said period by sending a Notification of the option of sale to GyM S.A., so that in such event GyM S.A. will only fulfill its obligations by purchasing one hundred (100%) of the shares held by the previous shareholder.

Section 7.3 (c) is replaced in its entirety by the following:

(c) The price per share in each sale option shall be equal to the base price per share plus an interest charge. The base price per share shall be the result of dividing 5,375 times the EBITDA of the twelve (12) months prior to the date of receipt of the Notification of the option of sale by GyM S.A. minus DFN, between (and) all of the shares at the date of receipt of the Notice of option of sale by GyM S.A.; however, the corresponding base price per share shall not be less than the price per share corresponding to the purchase price [as that term is defined in the share sale Contract). The base price per Minimum action established in this Section 7.3 (c) shall not apply: (a) in a sale option that is triggered by the GyM S.A. share provision to a third party, when the GyM S.A. Stock provision does not result in a sale of the Company, and (b) in an Opt sales ion activated before an Exempt Operation. On the base price per share, remuneration interest will be caused at an annual interest rate composed of two point seventy percent (2.70%) as of (i) February 14, 2018 for option 1; (ii) December 31, 2019 for sale option 2 and (iii) in both cases, up to the effective payment date of the purchase contract price concluded as a result of the exercise of each sale option.

XML

Work in Progress, Net

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Work in Progress, Net

11 WORK IN PROGRESS, NET

At December 31 this account comprises:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Unbilled receivable concessions in progress		32,212		23,117		—		—		32,212		23,117
Work in progress		28,538		49,457		28,538		49,457		—		—
		60,750		72,574		28,538		49,457		32,212		23,117

The ongoing work costs include all expenses incurred by the Group under construction contracts currently in force. The Group estimates that all the cost incurred will be billed and collected.

Below is the work in progress grouped by the main projects:

	2018		2019
Infrastructure
Road operation and maintenance		32,212		23,117
		32,212		23,117
Engineering and construction
Engineering and Construction Works - GYM Chile S.p.A.		13,007		19,531
Talara Refinery		—		20,126
North Concentrator Plant of Quellaveco		—		1,033
Others		15,531		8,767
		28,538		49,457
		60,750		72,574

XML

Work in Progress, Net - Summary of Unbilled Work in Progress (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure Of Unbilled Work In Progress [Line items]
Current, Work in Progress, net	S/ 49,457	S/ 28,538
Non-current, Work in Progress, net	23,117	32,212
Total	72,574	60,750
Unbilled receivable concessions in progress [member]
Disclosure Of Unbilled Work In Progress [Line items]
Non-current, Work in Progress, net	23,117	32,212
Total	23,117	32,212
Work in Progress [Member]
Disclosure Of Unbilled Work In Progress [Line items]
Current, Work in Progress, net	49,457	28,538
Total	S/ 49,457	S/ 28,538

XML

Transactions with Related Parties and Joint Operators - Summary of Sale Purchase of Goods Services (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	S/ 36,658	S/ 34,903
Accounts payable to related parties	38,916	55,941
Long-term accounts receivable from related parties	546,941	778,226
Long-term accounts payable to related parties	22,583	21,849
Gasoducto Sur Peruano S.A. [member]
Disclosure of transactions between related parties [line items]
Long-term accounts receivable from related parties	544,842	773,927
Peru Piping Spools S.A.C [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	2,632	225
Arturo Serna [member]
Disclosure of transactions between related parties [line items]
Accounts payable to related parties		647
Consorcio Rio Urubamba [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	9,042	9,122
Consorcio Peruano de Conservacion [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	3,592	6,417
Consorcio Italo Peruano [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	1,011	3,322
Accounts payable to related parties	363	4,996
Consorcio Constructor Chavimochic [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties		2,138
Accounts payable to related parties	5,953	6,199
Consorcio GyM Conciviles [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	1,257	1,855
Accounts payable to related parties	1,958
Consorcio La Gloria [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	1,750	1,369
Accounts payable to related parties	1,017	1,006
Consorcio Ermitano [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	831	781
Accounts payable to related parties	440	624
Consorcio Terminales del Peru S.A. [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	1,176	459
Consorcio TNT Vial y Vives - DSD Chile LTDA [member]
Disclosure of transactions between related parties [line items]
Accounts payable to related parties	1,088	11,804
Consorcio Rio Mantaro [member]
Disclosure of transactions between related parties [line items]
Accounts payable to related parties	5,869	6,655
Consorcio Vial Quinua [member]
Disclosure of transactions between related parties [line items]
Accounts payable to related parties	2,048	1,970
Consorcio Huacho Pativilca [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	1,419
Accounts payable to related parties	5,895	475
Consorcio CDEM [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	638
Consorcio GyM-Stracon [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	2,230
Consorcio GyM-OSSA [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	7,202
Consorcio Chicama Ascope [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	2,471
Ferrovias Argentina [member]
Disclosure of transactions between related parties [line items]
Accounts payable to related parties	12,183	10,242
Ferrovias Participaciones [member]
Disclosure of transactions between related parties [line items]
Long-term accounts payable to related parties	22,583	21,849
Joint operations [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	34,026	34,678
Accounts payable to related parties	26,733	45,052
Other related parties [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	2,632	225
Accounts payable to related parties	12,183	10,889
Other minors [member]
Disclosure of transactions between related parties [line items]
Accounts receivable from related parties	1,407	9,215
Accounts payable to related parties	2,102	11,323
Long-term accounts receivable from related parties	S/ 2,099	S/ 4,299

XML

Segment Reporting

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Segment Reporting

7 SEGMENT REPORTING

Operating segments are reported consistently with the internal reports that are reviewed by the Group’s chief decision-maker; that is, the Executive Committee, which is led by the Corporate General Manager. This Committee acts as the maximum authority in operations decision making and is responsible for allocating resources and evaluating the performance of each operating segment.

The Group’s operating segments are assessed by the activities of the following business units: (i) engineering and construction, (ii) infrastructure, (iii) real estate and (iv) parent company operations.

As set forth under IFRS 8, reportable segments based on the level of revenue is: ‘engineering and construction’. However, the Group has voluntarily decided to report on all its operating segments as detailed in this Note.

The revenues derived from foreign operations (Chile y Colombia) comprise 14% of the Group’s total revenue reported in 2019 (20.3% in 2018 and 10.6% in 2017).

Sales between segments are carried out at arm’s length, are not material, and are eliminated on consolidation. The revenue from external parties is measured in a manner consistent with that in the income statement. The sale of goods relates to the real estate segment. Revenue from services relate to all other segments.

Group sales and receivables are not concentrated in a few private customers. There is no external customer that represents 10% or more of the Group’s revenue.

The principal activities of the Group in each operating segments are as follows:

a) Engineering and construction: This segment includes from traditional engineering services such as structural, civil and design engineering, and architectural planning to advanced specialties including process design, simulation, and environmental services at three divisions; i) civil works, such as the construction of hydroelectric power stations and other large infrastructure facilities; (ii) electro-mechanic construction, such as concentrator plants, oil, and natural gas pipelines, and transmission lines; iii) building construction, such as office buildings, residential buildings, hotels, affordable housing projects, shopping centers, and industrial facilities.

b) Infrastructure: The Group has long-term concessions or similar contractual arrangements in Peru for three toll roads, the Lima Metro, a wastewater treatment plant in Lima, four producing oil fields, a gas processing plant and operation and maintenance services for infrastructure assets.

c) Real Estate: The Group develops and sells homes targeted to low and middle-income population sectors which are experiencing a significant increase in disposable income, as well as, office and commercial space to a lesser extent.

d) Parent Company Operation corresponds to services provided to related entities of the Group such as strategic and functional advisory services and operational leasing of offices.

The Executive Committee uses adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) to assess the performance of operating segments. In 2019, additional provisions were considered for some of the Group´s assets, such as impairment of investments, impairment of account receivables, impairment of goodwill, provision for civil repair and legal claims.

Profit before income tax reconciles to EBITDA as follows:

EBITDA

	2017		2018		2019
Net profit (loss)		209,238		57,415		(838,642	)
Financial income and expenses		137,035		197,057		157,053
Income tax		46,305		113,318		319,957
Depreciation and amortization		179,725		189,509		202,630
EBITDA (*)		572,303		557,299		(159,002	)

(*)  Discontinued operations not included    

EBITDA for each segment is as follows:

	2017			2018			2019
Engineering and construction		119,987			19,243			2,885
Infrastructure		300,935			411,502			355,296
Real estate		177,286			240,991			76,239
Parent company operations		125,938			(27,803	)		(1,077,259	)
Intercompany eliminations		(151,843	)		(86,634	)		483,837
EBITDA		572,303			557,299			(159,002	)

Backlog refers to the expected future revenue undersigned contracts and legally binding letters of intent. The breakdown by operating segments as of December 31, 2019, and the dates in which they are estimated to be realized is shown in the following table:

	As of December 31, 2019
Engineering and Construction		3,018,822
Infrastructure		1,837,305
Real estate		209,893
Intercompany eliminations		(434,039	)
		4,631,981

The following table shows the Group’s financial statements by operating segments:

Operating segments financial position

Segment reporting

			Infrastructure
	Engineering and construction		Energy		Toll roads		Transportation		Water treatment		Real estate		Parent Company operations		Eliminations			Consolidated
As of December 31, 2018
Assets.-
Cash and cash equivalent		177,455		34,816		168,460		191,178		6,700		93,262		129,269		—			801,140
Trade accounts receivables, net		583,842		54,350		78,013		226,919		598		63,038		1,068		—			1,007,828
Work in progress, net		24,962		—		—		—		—		—		3,576		—			28,538
Accounts receivable from related parties		203,583		492		40,820		758		9,930		60,759		98,308		(379,747	)		34,903
Other accounts receivable		386,467		37,611		28,492		31,012		199		55,508		49,160		2			588,451
Inventories, net		27,852		18,823		9,206		25,282		—		448,328		—		(15,444	)		514,047
Prepaid expenses		3,825		1,345		3,068		874		135		81		1,221		—			10,549
		1,407,986		147,437		328,059		476,023		17,562		720,976		282,602		(395,189	)		2,985,456
Non-current assets classified as held for sale		—		—		—		—		—		—		247,798		—			247,798
Total current assets		1,407,986		147,437		328,059		476,023		17,562		720,976		530,400		(395,189	)		3,233,254
Long-term trade accounts receivable, net		14,455		—		33,380		966,202		—		6,030		—		—			1,020,067
Long-term work in progress, net		—		—		32,212		—		—		—		—		—			32,212
Long-term accounts receivable from related parties		254,660		—		39,341		—		—		—		744,655		(260,430	)		778,226
Prepaid expenses		—		—		28,214		5,152		840		—		—		(509	)		33,697
Other long-term accounts receivable		77,028		63,797		7,058		64,817		7,346		30,268		52,645		(2	)		302,957
Investments in associates and joint ventures		114,676		7,230		—		—		—		5,604		2,213,023		(2,082,768	)		257,765
Investment property		—		—		—		—		—		29,133		—		—			29,133
Property, plant and equipment, net		205,678		171,430		14,585		1,586		109		9,237		69,088		(1,159	)		470,554
Intangible assets, net		160,088		183,614		466,153		749		—		1,105		23,514		11,872			847,095
Deferred income tax asset		166,624		5,025		11,876		—		620		17,127		218,201		5,963			425,436
Total non-current assets		993,209		431,096		632,819		1,038,506		8,915		98,504		3,321,126		(2,327,033	)		4,197,142
Total assets		2,401,195		578,533		960,878		1,514,529		26,477		819,480		3,851,526		(2,722,222	)		7,430,396
Liabilities.-
Borrowings		232,409		26,621		15,384		209,463		—		133,105		209,492		—			826,474
Bonds		—		—		25,745		13,422		—		—		—		—			39,167
Trade accounts payable		777,130		49,254		61,233		104,652		121		31,173		55,968		—			1,079,531
Accounts payable to related parties		179,351		1,933		46,099		65,256		58		35,085		91,754		(363,595	)		55,941
Current income tax		5,898		2,797		1,398		9,888		226		4,219		1,381		—			25,807
Other accounts payable		389,896		13,147		72,823		11,677		631		106,286		38,209		—			632,669
Provisions		521		5,412		—		—		—		264		—		—			6,197
Non-current liabilities classified as held for sale		—		—		—		—		—		—		225,828		—			225,828
Total current liabilities		1,585,205		99,164		222,682		414,358		1,036		310,132		622,632		(363,595	)		2,891,614
Borrowings		9,314		87,166		556		—		—		10,684		268,478		—			376,198
Long-term bonds		—		—		299,637		598,238		—		—		—		—			897,875
Other long-term accounts payable		357,146		—		31,477		154,756		1,656		26,470		2,605		—			574,110
Long-term accounts payable to related parties		8,880		—		1,167		81,207		23,445		—		183,826		(276,676	)		21,849
Provisions		32,122		20,234		—		—		—		—		51,055		—			103,411
Derivative financial instruments		—		61		—		—		—		—		—		—			61
Deferred income tax liability		5,564		24,541		7,010		37,178		—		—		1,054		—			75,347
Total non-current liabilities		413,026		132,002		339,847		871,379		25,101		37,154		507,018		(276,676	)		2,048,851
Total liabilities		1,998,231		231,166		562,529		1,285,737		26,137		347,286		1,129,650		(640,271	)		4,940,465
Equity attributable to controlling interest in the Company		331,178		323,943		332,406		171,594		340		193,483		2,708,803		(1,973,387	)		2,088,360
Non-controlling interest		71,786		23,424		65,943		57,198		—		278,711		13,073		(108,564	)		401,571
Total liabilities and equity		2,401,195		578,533		960,878		1,514,529		26,477		819,480		3,851,526		(2,722,222	)		7,430,396
As of December 31, 2019
Assets.-
Cash and cash equivalent		372,991		53,118		123,020		300,896		6,388		60,718		31,847		—			948,978
Trade accounts receivables, net		531,591		63,402		44,513		97,059		1,168		83,019		985		—			821,737
Work in progress, net		49,457		—		—		—		—		—		—		—			49,457
Accounts receivable from related parties		202,181		369		43,852		1,853		—		1,144		99,794		(312,535	)		36,658
Other accounts receivable		327,977		30,853		30,228		18,548		109		9,509		27,274		2			444,500
Inventories, net		57,093		32,366		7,109		30,594		—		437,012		—		(11,601	)		552,573
Prepaid expenses		6,812		1,271		2,779		231		133		—		122		—			11,348
		1,548,102		181,379		251,501		449,181		7,798		591,402		160,022		(324,134	)		2,865,251
Non-current assets classified as held for sale		2,398		—		—		—		—		—		203,020		—			205,418
Total current assets		1,550,500		181,379		251,501		449,181		7,798		591,402		363,042		(324,134	)		3,070,669
Long-term trade accounts receivable, net		97,256		—		36,273		619,086		—		587		—		—			753,202
Long-term work in progress, net		—		—		23,117		—		—		—		—		—			23,117
Long-term accounts receivable from related parties		290,966		—		836		—		10,475		—		552,687		(308,023	)		546,941
Prepaid expenses		—		887		24,462		2,307		788		—		—		(510	)		27,934
Other long-term accounts receivable		113,879		63,649		5,156		—		7,346		50,449		59,844		—			300,323
Investments in associates and joint ventures		109,839		8,006		—		—		—		6,062		1,495,422		(1,582,294	)		37,035
Investment property		1,450		—		—		—		—		26,876		—		—			28,326
Property, plant and equipment, net		186,589		184,819		11,106		841		153		11,742		49,779		(1,159	)		443,870
Intangible assets, net		136,547		244,901		443,420		794		—		1,029		19,490		7,134			853,315
Right-of-use assets, net		5,638		24,038		3,860		5		7		5,048		55,532		(15,315	)		78,813
Deferred income tax asset		176,740		4,741		13,054		—		720		19,736		20,752		5,176			240,919
Total non-current assets		1,118,904		531,041		561,284		623,033		19,489		121,529		2,253,506		(1,894,991	)		3,333,795
Total assets		2,669,404		712,420		812,785		1,072,214		27,287		712,931		2,616,548		(2,219,125	)		6,404,464
Liabilities.-
Borrowings		180,535		42,760		2,383		5		6		116,231		121,379		(9,039	)		454,260
Bonds		—		—		28,995		15,742		—		—		—		—			44,737
Trade accounts payable		932,142		67,444		34,762		28,508		132		39,645		33,488		—			1,136,121
Accounts payable to related parties		206,907		2,233		35,554		21,024		—		23,437		58,951		(309,190	)		38,916
Current income tax		18,451		961		3,710		23,887		—		704		286		—			47,999
Other accounts payable		441,271		16,721		53,987		4,713		835		83,345		34,433		—			635,305
Provisions		6,031		18,459		6,183		—		—		230		82,580		—			113,483
Non-current liabilities classified as held for sale		—		—		—		—		—		—		210,025		—			210,025
Total current liabilities		1,785,337		148,578		165,574		93,879		973		263,592		541,142		(318,229	)		2,680,846
Borrowings		32,620		116,218		2,070		—		—		11,010		190,671		(7,783	)		344,806
Long-term bonds		—		—		276,550		602,755		—		—		—		—			879,305
Other long-term accounts payable		222,887		—		15,989		2,176		2,106		26,841		3,102		—			273,101
Long-term accounts payable to related parties		120,255		—		836		22,583		23,784		—		165,286		(310,161	)		22,583
Provisions		80,125		40,268		24,691		1,394		—		—		68,474		—			214,952
Derivative financial instruments		—		52		—		—		—		—		—		—			52
Deferred income tax liability		31,037		36,476		5,806		39,172		—		—		243		—			112,734
Total non-current liabilities		486,924		193,014		325,942		668,080		25,890		37,851		427,776		(317,944	)		1,847,533
Total liabilities		2,272,261		341,592		491,516		761,959		26,863		301,443		968,918		(636,173	)		4,528,379
Equity attributable to controlling interest in the Company		330,992		346,415		258,223		232,692		424		137,542		1,644,707		(1,473,185	)		1,477,810
Non-controlling interest		66,151		24,413		63,046		77,563		—		273,946		2,923		(109,767	)		398,275
Total liabilities and equity		2,669,404		712,420		812,785		1,072,214		27,287		712,931		2,616,548		(2,219,125	)		6,404,464

Operating segment performance

Segment Reporting

				Infrastructure
	Engineering																		Parent
	and												Water			Real			Company
	construction			Energy			Toll roads			Transportation			treatment			estate			operations			Eliminations			Consolidated
For the year ended December 31, 2017 -
Revenue		2,331,907			436,876			642,127			365,771			3,152			647,535			70,050			(483,405	)		4,014,013
Gross profit (loss)		176,473			71,825			139,196			48,696			445			147,383			(37,771	)		(43,795	)		502,452
Administrative expenses		(188,162	)		(15,854	)		(32,453	)		(15,279	)		(317	)		(21,189	)		(100,968	)		51,768			(322,454	)
Other income and expenses, net		(46,445	)		5,138			1,061			5			—			(3,700	)		10,512			560			(32,869	)
Gain from the sale of investments		—			—			—			—			—			49,002			(18,672	)		4,215			34,545
Operating (loss) profit		(58,134	)		61,109			107,804			33,422			128			171,496			(146,899	)		12,748			181,674
Financial expenses		(46,655	)		(13,423	)		(6,892	)		(8,000	)		(50	)		(21,918	)		(81,310	)		27,471			(150,777	)
Financial income		8,491			1,965			3,257			3,606			26			3,569			35,431			(42,603	)		13,742
Share of profit or loss in associates and joint ventures		30,982			1,584			—			—			—			456			142,595			(175,144	)		473
(Loss) profit before income tax		(65,316	)		51,235			104,169			29,028			104			153,603			(50,183	)		(177,528	)		45,112
Income tax		877			(13,151	)		(32,290	)		(9,544	)		(228	)		(35,900	)		44,032			(101	)		(46,305	)
(Loss) profit from continuing operations		(64,439	)		38,084			71,879			19,484			(124	)		117,703			(6,151	)		(177,629	)		(1,193	)
Profit (Loss) from discontinuing operations		76,837			—			—			—			—			—			123,603			9,991			210,431
(Loss) profit for the year		12,398			38,084			71,879			19,484			(124	)		117,703			117,452			(167,638	)		209,238
(Loss) profit from attributable to:
Owners of the Company		12,078			33,714			55,620			14,613			(124	)		48,647			125,182			(140,992	)		148,738
Non-controlling interest		320			4,370			16,259			4,871			—			69,056			(7,730	)		(26,646	)		60,500
		12,398			38,084			71,879			19,484			(124	)		117,703			117,452			(167,638	)		209,238
For the year ended December 31, 2018 -
Revenue		1,960,863			560,506			733,148			586,329			3,270			630,130			62,098			(636,882	)		3,899,462
Gross profit (loss)		62,095			120,360			107,092			122,567			592			287,959			(10,564	)		(15,612	)		674,489
Administrative expenses		(136,066	)		(20,898	)		(35,626	)		(12,007	)		(296	)		(50,730	)		(62,890	)		40,080			(278,433	)
Other income and expenses, net		(13,515	)		1,243			(11	)		31			—			(1,971	)		(47,779	)		660			(61,342	)
Operating (loss) profit		(87,486	)		100,705			71,455			110,591			296			235,258			(121,233	)		25,128			334,714
Financial expenses		(82,861	)		(15,631	)		(26,691	)		(20,604	)		6			(11,859	)		(115,077	)		24,735			(247,982	)
Financial income		15,122			4,593			2,560			35,147			554			3,556			31,752			(42,359	)		50,925
Share of profit or loss in associates and joint ventures		11,366			1,608			—			—			—			(10	)		84,138			(100,811	)		(3,709	)
(Loss) profit before income tax		(143,859	)		91,275			47,324			125,134			856			226,945			(112,076	)		(101,651	)		133,948
Income tax		14,361			(26,275	)		(15,737	)		(38,017	)		(517	)		(69,166	)		22,867			(834	)		(113,318	)
(Loss) profit from continuing operations		(129,498	)		65,000			31,587			87,117			339			157,779			(89,209	)		(102,485	)		20,630
Profit (Loss) from discontinuing operations		44,096			—			—			—			—			—			(3,709	)		(3,602	)		36,785
(Loss) profit for the year		(85,402	)		65,000			31,587			87,117			339			157,779			(92,918	)		(106,087	)		57,415
(Loss) profit from attributable to:
Owners of the Company		(86,857	)		59,866			26,731			65,338			339			28,921			(85,715	)		(91,811	)		(83,188	)
Non-controlling interest		1,455			5,134			4,856			21,779			—			128,858			(7,203	)		(14,276	)		140,603
		(85,402	)		65,000			31,587			87,117			339			157,779			(92,918	)		(106,087	)		57,415
For the year ended December 31, 2019 -
Revenue		2,797,326			552,584			633,301			397,853			3,555			264,401			87,476			(651,492	)		4,085,004
Gross profit (loss)		98,362			108,291			96,164			119,464			500			70,787			(2,168	)		(49,637	)		441,763
Administrative expenses		(141,421	)		(24,230	)		(28,623	)		(17,991	)		(397	)		(22,045	)		(40,402	)		61,201			(213,908	)
Other income and expenses, net		9,937			606			(47,998	)		(2,661	)		12			20,020			(305,749	)		(921	)		(326,754	)
Gain from sale of investments		—			—			—			—			—			—			—			—			—
Operating (loss) profit		(33,122	)		84,667			19,543			98,812			115			68,762			(348,319	)		10,643			(98,899	)
Financial expenses		(74,171	)		(13,266	)		(27,297	)		(10,948	)		(12	)		(42,320	)		(101,914	)		38,219			(231,709	)
Financial income		5,643			2,033			2,245			33,215			826			3,829			73,832			(46,967	)		74,656
Dividends		—			—			—			—			—			—			12,688			(12,688	)		—
Share of profit or loss in associates and joint ventures		(3,558	)		2,293			—			—			—			458			(711,962	)		493,995			(218,774	)
(Loss) profit before income tax		(105,208	)		75,727			(5,509	)		121,079			929			30,729			(1,075,675	)		483,202			(474,726	)
Income tax		(35,457	)		(22,911	)		(17,112	)		(39,634	)		(506	)		(7,000	)		(196,219	)		(1,118	)		(319,957	)
(Loss) profit from continuing operations		(140,665	)		52,816			(22,621	)		81,445			423			23,729			(1,271,894	)		482,084			(794,683	)
Loss from discontinuing operations		—			—			—			—			—			—			(42,857	)		(1,102	)		(43,959	)
(Loss) profit for the year		(140,665	)		52,816			(22,621	)		81,445			423			23,729			(1,314,751	)		480,982			(838,642	)
(Loss) profit from attributable to:
Owners of the Company		(137,110	)		48,056			(28,270	)		61,084			423			(4,995	)		(1,304,675	)		480,766			(884,721	)
Non-controlling interest		(3,555	)		4,760			5,649			20,361			—			28,724			(10,076	)		216			46,079
		(140,665	)		52,816			(22,621	)		81,445			423			23,729			(1,314,751	)		480,982			(838,642	)

Segments by geographical area

	2017		2018		2019
Revenues:
- Peru		3,589,048		3,347,540		3,454,959
- Chile		371,986		226,891		388,284
- Colombia		50,829		325,031		241,761
- Bolivia		2,150		—		—
		4,014,013		3,899,462		4,085,004
Non-current assets:
- Peru		4,164,342		3,896,920		3,063,146
- Chile		407,152		142,383		146,891
- Colombia		203,203		157,839		123,758
- Bolivia		149		—		—
- Guyana		878		—		—
		4,775,724		4,197,142		3,333,795

XML

Investments In Associates And Joint Ventures - Summary of Financial Information for Associates (Parenthetical) (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of financial information of associates [line items]
Gross profit	S/ 441,763	S/ 674,489	S/ 502,452
Gasoducto Sur Peruano S.A. [member]
Disclosure of financial information of associates [line items]
Gross profit				S/ 800	S/ 257,700

XML

Standards, Amendments and Interpretation Adopted in 2019 - Additional Information (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Jan. 01, 2019
Disclosure Of Classification and measurement of financial assets and liabilities [line items]
Right-of-use assets	S/ 78,813
Lease liabilities	80,216
Income tax accrual	113,062	S/ 150,020	S/ 168,143
GMP S.A. [member]
Disclosure Of Classification and measurement of financial assets and liabilities [line items]
Right-of-use assets	24,000
Graa y montero S.A.A. [member]
Disclosure Of Classification and measurement of financial assets and liabilities [line items]
Right-of-use assets	54,000
IFRS16 [Member]
Disclosure Of Classification and measurement of financial assets and liabilities [line items]
Average interest rate of lease liabilities				7.30%
Right-of-use assets				S/ 97,700
Lease liabilities				S/ 97,700
Lease percentage in total asset				1.33%
Lease percentage in total liabilities				2.15%
IFRIC 23 [Member]
Disclosure Of Classification and measurement of financial assets and liabilities [line items]
Income tax accrual	500
Retained earnings	1,500
Decrease in deferred income tax assets	S/ 1,000

XML

Tax Situation (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Income Tax Expense

c) The income tax expense shown in the consolidated statement of income comprises:

	2017			2018			2019
Current income tax		168,143			150,020			113,062
Deferred income tax (Note 24)		(44,550	)		(23,594	)		206,895
PPUA		613			—			—
		124,206			126,426			319,957
(-) Discontinued Operations		(77,901	)		(13,108	)
Income tax expense		46,305			113,318			319,957

Summary of Weighted-Average Income Tax Rate Applicable To Pre-tax Income

d) The Group’s income tax differs from the theoretical amount that would have resulted from applying the weighted-average income tax rate applicable to the profit reported by of the consolidated companies, as follows:

	2017			2018			2019
Profit (loss) before income tax		45,112			133,948			(474,726	)
Income tax by applying local applicable tax rates on profit generated in the respective countries		13,811			40,507			(141,370	)
Tax effect on:
- Reversal of deferred income tax asset		—			—			174,716
- Non-recoverable item		—			—			85,301
- Non-deductible expenses		30,472			70,052			84,832
- Unrecognized deferred income tax asset		1,562			8,592			82,424
- Change in prior years estimations		9,005			3,235			36,529
- Provision of tax contingencies		—			—			7,079
- Adjustment for changes in rates of income tax		27			1,524			622
- PPUA adjustment for changes in tax rates		(611	)		—			—
- Non-taxable income		(4	)		(1,691	)		(1,195	)
- Equity method (profit) loss		394			(1,094	)		(64	)
- Others		(8,351	)		(7,807	)		(8,917	)
Income tax		46,305			113,318			319,957

Summary of Weighted Average Pre-tax Profit or Loss and Applicable Income Tax Rate

Country	Rates Taxes local Applicable			Utility before the Tax to Rent			Tax to rent
	(A)			(B)			(A)*(B)
2017
Perú		28.00	%		420,421			124,024
Perú – Norvial S.A.		27.00	%		68,104			18,388
Perú – GyM Ferrovías S.A.		30.00	%		29,028			8,708
Peru – Vía Expresa Sur S.A.		30.00	%		779			234
Perú – GMP S.A.		30.00	%		20,941			6,073
Chile		24.00	%		(93,031	)		(23,723	)
Colombia		40.00	%		(27,970	)		(11,188	)
Bolivia		25.00	%		(2,897	)		(724	)
Unrealized gains					(370,263	)		(107,981	)
Total					45,112			13,811
2018
Peru		29.50	%		151,627			44,730
Peru – Norvial S.A.		27.00	%		21,104			5,698
Peru – GyM Ferrovías S.A.		30.00	%		125,136			37,541
Peru – Vía Expresa Sur S.A.		30.00	%		2,951			885
Peru – GMP S.A.		29.00	%		35,421			10,272
Chile		27.00	%		(20,768	)		(5,607	)
Colombia – Morelco S.A.		37.00	%		11,851			4,385
Colombia – GyM S.A. Branch		33.00	%		1,984			655
Bolivia		25.00	%		(137	)		(34	)
Unrealized gains					(195,221	)		(58,018	)
					133,948			40,507
2019
Peru		29.50	%		(1,612,192	)		(475,597	)
Peru – Norvial S.A.		27.00	%		24,066			6,498
Peru – GyM Ferrovías S.A.		30.00	%		121,080			36,324
Peru – Vía Expresa Sur S.A.		30.00	%		(17,752	)		(5,326	)
Peru – GMP S.A.		29.00	%		35,421			10,272
Chile		27.00	%		(36,917	)		(9,967	)
Colombia – GyM S.A. Branch		33.00	%		(11,824	)		(3,902	)
Bolivia		25.00	%		681			170
Unrealized gains					1,022,711			300,158
					(474,726	)		(141,370	)

XML

Discountinued Operations and Non-current Asset Classified as Held for Sale (Tables)

12 Months Ended

Dec. 31, 2019

Statement [line items]

Summary of Non-current Assets and Liabilities Held for Sale

	At December 31,
	2018		2019
ASSETS
Cash and cash equivalets		6,074		1,723
Accounts receivables, net		157,351		129,739
Inventories, net		3,999		2,828
Other assets, net		80,374		68,730
Total assets		247,798		203,020
LIABILITIES
Borrowings		71,810		91,529
Accounts payable		148,817		118,497
Deferred income tax liabilities		5,201		—
Total liabilities		225,828		210,026
Total net assets		21,970		(7,006	)

CAM Servicios del Peru SA and CAM Chile SA[member]

Statement [line items]

Summary on the Financial Performance and Cash Flow Information

Below is the information on the financial result and cash flow from discontinued operations, GMD S.A., Stracon GyM S.A., CAM Servicios del Peru S.A., CAM Chile S.A. (done) and Adexus S.A. (planned):

	Discontinued operations
	At December 31,
	2017						2018						2019
	GMD Grupo CAM and Stracon GyM			Adexus S.A.			Grupo CAM and Stracon GyM			Adexus S.A.			Adexus S.A.
	(Completed)			(Planned)			(Completed)			(Planned)			(Planned)
Revenues		1,894,055			284,024			1,010,739			302,936			252,857
Operating costs		(1,751,317	)		(239,680	)		(968,375	)		(263,455	)		(244,183	)
Gross profit		142,738			44,344			42,364			39,481			8,674
Administrative expenses		(83,483	)		(32,761	)		(56,950	)		(32,730	)		(34,744	)
Other (expenses) income, net		13,279			(835	)		860			(4,519	)		(12,740	)
Gain from the sale of investments		21,554			—			—			—			—
Operating (loss) profit		94,088			10,748			(13,726	)		2,232			(38,810	)
Financial expenses		(27,398	)		(10,755	)		(19,971	)		(12,786	)		(24,359	)
Financial income		2,269			264			6,253			610			2,625
Share of the profit or loss in associates and joint ventures		854
Loss before income tax		69,813			257			(27,444	)		(9,944	)		(60,544	)
Income tax		(14,110	)		147			7,112			2,325			16,585
Loss from discontinued operations (a)		55,703			404			(20,332	)		(7,619	)		(43,959	)
Details of the sale of the subsidiary
Revenues from the sale of investments		269,961			—			310,855			—			—
Cost from the sale of investments		(51,697	)		—			(237,213	)		—			—
Income tax expense on gain		(63,940	)		—			(8,906	)		—			—
Gain on sale after income tax (b)		154,324			—			64,736			—			—
Net effect in consolidated (a) + (b)		210,027			404			44,404			(7,619	)		(43,959	)
Cash flows relating to the discontinued operations are as follows:
Operating cash flows		149,687			6,083			6,967			36,450			437
Investing cash flows		(10,377	)		(19,570	)		(11,474	)		(18,141	)		—
Financing cash flows		(136,165	)		14,059			526			(21,422	)		(1,250	)
Net increase generated in subsidiary		3,145			572			(3,981	)		(3,113	)		(813	)

XML

Investments In Associates And Joint Ventures - Summary of Detailed Information about Investment in Associates (Detail) S/ in Thousands, $ in Millions	1 Months Ended	12 Months Ended
	Nov. 30, 2015	Dec. 31, 2019 PEN (S/)	Dec. 31, 2018 PEN (S/)	Dec. 31, 2019 USD ($)	Dec. 31, 2017 PEN (S/)	Dec. 31, 2016 PEN (S/)
Disclosure of associates and joint ventures [line items]
Carrying amount		S/ 28,875	S/ 250,282		S/ 250,053	S/ 286,403
Gasoducto Sur Peruano S.A. [member]
Disclosure of associates and joint ventures [line items]
Interest in capital	20.00%
Concesionaria Chavimochic S.A.C. [member]
Disclosure of associates and joint ventures [line items]
Carrying amount | $				$ 647
Other Associates [member]
Disclosure of associates and joint ventures [line items]
Carrying amount		S/ 327	S/ 776
Common Share [member] | Gasoducto Sur Peruano S.A. [member]
Disclosure of associates and joint ventures [line items]
Interest in capital		21.49%	21.49%
Carrying amount			S/ 218,276
Common Share [member] | Concesionaria Chavimochic S.A.C. [member]
Disclosure of associates and joint ventures [line items]
Interest in capital		26.50%	26.50%
Carrying amount		S/ 18,320	S/ 20,524
Common Share [member] | Peru Piping Spools S.A.C. [member]
Disclosure of associates and joint ventures [line items]
Interest in capital		33.33%	33.33%
Carrying amount		S/ 4,166	S/ 5,102
Common Share [member] | Obratres S.A.C. [Member]
Disclosure of associates and joint ventures [line items]
Interest in capital		37.50%	37.50%
Carrying amount		S/ 3,756	S/ 3,758
Common Share [member] | Inversiones Majes S.A. [Member]
Disclosure of associates and joint ventures [line items]
Interest in capital		9.59%	9.59%
Carrying amount		S/ 2,306	S/ 1,846

XML

Financial Risk Management - Schedule of Foreign Currency Exchange Gains and Losses Exposure against US Dollar (Detail) - Foreign exchange risk [member] - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure Of Financial Risk Management [line items]
Gain	S/ 390,008	S/ 382,104	S/ 329,751
Loss	S/ (422,578)	S/ (405,380)	S/ (323,927)

XML

Tax Situation - Summary of Income Tax Expense (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Major components of tax expense (income) [abstract]
Current income tax	S/ 113,062	S/ 150,020	S/ 168,143
Deferred income tax (Note 24)	206,895	(23,594)	(44,550)
PPUA			613
Total	319,957	126,426	124,206
(-) Discontinued operations		(13,108)	(77,901)
Income tax	S/ 319,957	S/ 113,318	S/ 46,305

XML

Property, Plant and Equipment, Net and Right-of-Use Assets (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Movement in Property, Plant and Equipment Accounts and Its Related Accumulated Depreciation

The movement in property, plant and equipment accounts and its related accumulated depreciation for the year ended December 31, 2017, 2018 and 2019 is as follows:

	Land			Buildings			Machinery			Vehicles			Furniture and fixtures			Other equipment			Replacement and in-transit units			Work in progress			Total
At January 1, 2017
Cost		32,614			241,352			1,090,460			443,641			59,593			246,102			21,701			18,853			2,154,316
Accumulated depreciation and impairment		—			(46,256	)		(556,907	)		(239,822	)		(39,422	)		(158,301	)		(9	)		—			(1,040,717	)
Net carrying amount		32,614			195,096			533,553			203,819			20,171			87,801			21,692			18,853			1,113,599
Net initial carrying amount		32,614			195,096			533,553			203,819			20,171			87,801			21,692			18,853			1,113,599
Additions		157			2,724			48,207			36,594			11,607			36,179			23,802			13,178			172,448
Deconsolidation, net		(3,713	)		(26,109	)		—			(1,527	)		(2,153	)		(46,032	)		(3,903	)		(4	)		(83,441	)
Reclassifications, net		—			1,969			12,459			2,888			609			6,579			(17,524	)		(6,980	)		—
Transfers to intangibles (Note 17)		—			—			2,119			724			—			—			(964	)		(2,048	)		(169	)
Deduction for sale of assets		(5,616	)		(51,736	)		(149,202	)		(92,079	)		(4,200	)		(5,270	)		—			—			(308,103	)
Disposals, net		—			(245	)		(4,032	)		(7,507	)		(422	)		(9,413	)		(230	)		(3,606	)		(25,455	)
Depreciation charge		—			(12,469	)		(100,976	)		(45,457	)		(11,654	)		(26,928	)		—			—			(197,484	)
Impairment loss		—			—			(14,328	)		—			—			—			—			(352	)		(14,680	)
Depreciation for sale deductions		—			3,579			115,864			84,145			1,049			3,128			—			—			207,765
Translations adjustments		236			152			606			(350	)		(23	)		980			—			(346	)		1,255
Net final carrying amount		23,678			112,961			444,270			181,250			14,984			47,024			22,873			18,695			865,735
At December 31, 2017
Cost		23,678			157,949			998,207			380,724			62,435			180,409			22,882			19,047			1,845,331
Accumulated depreciation and impairment		—			(44,988	)		(553,937	)		(199,474	)		(47,451	)		(133,385	)		(9	)		(352	)		(979,596	)
Net carrying amount		23,678			112,961			444,270			181,250			14,984			47,024			22,873			18,695			865,735
At January 1, 2018
Cost		23,678			157,949			998,207			380,724			62,435			180,409			22,882			19,047			1,845,331
Accumulated depreciation and impairment		—			(44,988	)		(553,937	)		(199,474	)		(47,451	)		(133,385	)		(9	)		(352	)		(979,596	)
Net carrying amount		23,678			112,961			444,270			181,250			14,984			47,024			22,873			18,695			865,735
Net initial carrying amount		23,678			112,961			444,270			181,250			14,984			47,024			22,873			18,695			865,735
Additions		—			13,216			11,318			9,377			2,145			14,122			5,577			27,431			83,186
Desconsolidation, net		(3,183	)		(33,989	)		(108,993	)		(110,859	)		(1,539	)		(32,878	)		—			(715	)		(292,156	)
Reclassifications		—			17,129			16,626			(1,415	)		(1,430	)		75			(10,577	)		(20,408	)		—
Deduction for sale of assets		—			(3,527	)		(55,567	)		(32,399	)		(2,164	)		(2,200	)		(124	)		—			(95,981	)
Disposals, net		—			(9,723	)		(2,607	)		(1,418	)		(292	)		(461	)		—			(118	)		(14,619	)
Depreciation charge		—			(14,257	)		(67,430	)		(19,391	)		(3,954	)		(18,068	)		—			—			(123,100	)
Impairment loss		—			—			(5,664	)		—			—			—			—			—			(5,664	)
Depreciation for sale deductions		—			1,189			37,452			14,868			1,813			1,702			—			—			57,024
Translations adjustments		(286	)		3,383			(3,310	)		(788	)		(134	)		(2,415	)		—			(321	)		(3,871	)
Net final carrying amount		20,209			86,382			266,095			39,225			9,429			6,901			17,749			24,564			470,554
At December 31, 2018
Cost		20,209			112,548			694,284			83,345			57,222			106,068			17,758			24,916			1,116,350
Accumulated depreciation and impairment		—			(26,166	)		(428,189	)		(44,120	)		(47,793	)		(99,167	)		(9	)		(352	)		(645,796	)
Net carrying amount		20,209			86,382			266,095			39,225			9,429			6,901			17,749			24,564			470,554
At January 1, 2019
Cost		20,209			112,548			694,284			83,345			57,222			106,068			17,758			24,916			1,116,350
Accumulated depreciation and impairment		—			(26,166	)		(428,189	)		(44,120	)		(47,793	)		(99,167	)		(9	)		(352	)		(645,796	)
Net carrying amount		20,209			86,382			266,095			39,225			9,429			6,901			17,749			24,564			470,554
Net initial carrying amount		20,209			86,382			266,095			39,225			9,429			6,901			17,749			24,564			470,554
Additions		290			396			23,011			861			687			8,693			7,036			39,584			80,558
Transfer to investment property (i)		(273	)		(1,187	)		—			—			—			—			—			—			(1,460	)
Reclassifications		—			1,544			40,840			1,033			118			2,054			(14,163	)		(31,426	)		—
Deduction for sale of assets		—			(78	)		(22,885	)		(9,531	)		(133	)		(2,789	)		(9	)		—			(35,425	)
Disposals, net		—			—			(316	)		(101	)		(187	)		(229	)		—			(804	)		(1,637	)
Depreciation charge		—			(5,992	)		(48,035	)		(9,782	)		(2,092	)		(6,137	)		—			—			(72,038	)
Impairment loss		—			—			(4,232	)		—			—			—			—			(15,786	)		(20,018	)
Depreciation for sale deductions		—			78			20,597			5,232			86			2,717			—			—			28,710
Translations adjustments		(525	)		(360	)		(3,719	)		(726	)		(13	)		(31	)		—			—			(5,374	)
Net final carrying amount		19,701			80,783			271,356			26,211			7,895			11,179			10,613			16,132			443,870
At December 31, 2019
Cost		19,974			113,339			726,173			74,434			55,710			111,696			10,624			32,270			1,144,220
Accumulated depreciation and impairment		(273	)		(32,556	)		(454,817	)		(48,223	)		(47,815	)		(100,517	)		(11	)		(16,138	)		(700,350	)
Net carrying amount		19,701			80,783			271,356			26,211			7,895			11,179			10,613			16,132			443,870

Summary of Depreciation of Property, Plant and Equipment and Investment Property

Depreciation of property, plant and equipment and investment property is distributed in the income statement as follows:

	2017			2018			2019
Cost of services and goods (Note 26)		103,566			81,199			95,445
Administrative expenses (Note 26)		5,776			5,135			1,907
(+) Depreciation discontinued operations		90,452			39,085			—
Total depreciation related to property, plant and equipment and investment property		199,794			125,419			97,352
(-) Depreciation related to investment property		(2,310	)		(2,319	)		(2,356	)
(-) Depreciation related to right-of-use assets		—			—			(22,958	)
Total depreciation of property, plant and equipment		197,484			123,100			72,038

Summary of Net Carrying Amount of Machinery and Equipment, Vehicles and Furniture and Fixtures Acquired Under Finance Lease Contracts

The net carrying amount of machinery and equipment, vehicles and furniture and fixtures acquired under finance lease contracts are broken down as follows:

	At December 31,
	2017			2018			2019
Cost of acquisition		650,301			86,881			67,310
Accumulated depreciation		(351,447	)		(38,026	)		(44,671	)
Net carrying amount		298,854			48,855			22,639

Summary of Group Recognized Assets And Liabilities For Right-Of-Use

As of December 31, 2019, the Group recognized assets and liabilities for right-of-use, as shown in the following table:

	Buildings			Machinery and equipments			Vehicles			Total
At January 1, 2019
Additions		63,479			18,597			19,669			101,745
Depreciation charge		(7,541	)		(6,899	)		(8,518	)		(22,958	)
Translations adjustments		26			—			—			26
Net final carrying amount		55,964			11,698			11,151			78,813
At December 31, 2019
Cost		63,505			18,597			19,669			101,771
Accumulated depreciation		(7,541	)		(6,899	)		(8,518	)		(22,958	)
Net carrying amount		55,964			11,698			11,151			78,813

Summary of Distribution Expense For Depreciation Of Right-Of-Use Assets

The expense for depreciation of right-of-use assets for the year ended December 31, 2019 has been distributed in the following items of the consolidated statement of income:

	2019
Cost of services and goods		20,011
Administrative expenses		2,947
		22,958

XML

Borrowings - Summary of Minimum Payment by Maturity and the Present Value of the Lease Liability for Right-of-use Asset Obligations (Detail) S/ in Thousands	Dec. 31, 2019 PEN (S/)
Disclosure Of Future Minimum Lease Payments [Line Items]
Undiscounted Future Minimum Lease Payments	S/ 102,524
Future financial charges	(22,308)
Present value of the lease liability for right-of-use asset obligations	80,216
Maturity Period Less than One Year [member]
Disclosure Of Future Minimum Lease Payments [Line Items]
Undiscounted Future Minimum Lease Payments	24,966
Present value of the lease liability for right-of-use asset obligations	18,246
Maturity Period Greater than One and Less than Five Year [member]
Disclosure Of Future Minimum Lease Payments [Line Items]
Undiscounted Future Minimum Lease Payments	69,955
Present value of the lease liability for right-of-use asset obligations	54,595
Maturity Period Greater than Five Year [member]
Disclosure Of Future Minimum Lease Payments [Line Items]
Undiscounted Future Minimum Lease Payments	7,603
Present value of the lease liability for right-of-use asset obligations	S/ 7,375

XML

Other Comprehensive Income - Summary of Accumulated Other Comprehensive Income Loss (Parenthetical) (Detail) S/ in Millions	12 Months Ended
	Dec. 31, 2018 PEN (S/)
CAM Chile S.A. [member]
Disclosure of analysis of other comprehensive income by item [line items]
Transfer to profit or loss (Note 10)	S/ 14.8

XML

Tax Situation - Additional Information (Detail) S/ in Thousands, $ in Millions		12 Months Ended
	Jan. 01, 2020	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019 PEN (S/)	Dec. 31, 2018 PEN (S/)	Dec. 31, 2018 COP ($)	Dec. 31, 2017 PEN (S/)
Disclosure of Income Tax [Line items]
Current income tax payable					S/ 113,062	S/ 150,020		S/ 168,143
Write off of deferred income tax asset					172,000
Impairment of investments					(374)
Negocios Gas S.A [member]
Disclosure of Income Tax [Line items]
Impairment of investments					67,000
GyM S.A [member]
Disclosure of Income Tax [Line items]
Impairment of accounts receivable					7,700
Concesionaria Vesur S.A. And Promotora Larcomar S.A [member]
Disclosure of Income Tax [Line items]
Impairment of work in progress					10,800
GyM Ferrovias S.A. [member]
Disclosure of Income Tax [Line items]
Current income tax payable					S/ 7,000	20,000
Inmobiliaria Almonte S.A.[member]
Disclosure of Income Tax [Line items]
Current income tax payable						S/ 10,000
Chile (member)
Disclosure of Income Tax [Line items]
Income tax rate					27.00%	27.00%	27.00%	24.00%
Colombia (member)
Disclosure of Income Tax [Line items]
Income tax rate					33.00%	37.00%	37.00%	40.00%
Effective tax rate						33.00%	33.00%
Effective tax rate, temporary overrate						4.00%	4.00%
Taxable income						S/ 895	$ 800
Withholding tax rate for payments in abroad					20.00%
Withholding tax rate for payments to non resident					20.00%
Withholding tax rate to payments for financial returns to non residents					15.00%
Withholding tax rate to payments to the parent company					33.00%
Time period for corrections in tax returns					3 years
Limitation period for income taxpayers subject to transfer prices and tax losses					5 years
Increase in taxable income compared to previous year					30.00%
Limitation for tax return description					In case of an increase in taxable income of 30% with respect to the previous year, for fiscal years 2020 and 2021, the statute of limitation of the returns would be six (6) months and in the case of a 20% increase year will be close at month twelve (12).
Colombia (member) | Subsidiary one [member]
Disclosure of Income Tax [Line items]
Effective tax rate						37.00%	37.00%
Colombia (member) | Subsidiary two [member]
Disclosure of Income Tax [Line items]
Effective tax rate						33.00%	33.00%
Peru [member]
Disclosure of Income Tax [Line items]
Income tax rate					29.50%	29.50%	29.50%	28.00%
Tax rate applicable to net assets exceeding S/1 million					0.40%
Current income tax payable						S/ 1,000
Changes in tax rates or tax laws enacted or announced [member] | Colombia (member)
Disclosure of Income Tax [Line items]
Percent of liquid income on liquid assets	3.50%
Percentage of presumptive income			0.00%	0.50%
Tax rate on foreign entities		30.00%	31.00%	32.00%

XML

Intangible Assets - Summary of Amortization of Intangibles (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Amortisation expense of intangible assets	S/ 105,278	S/ 112,072	S/ 86,557
Cost of sales and services [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Amortisation expense of intangible assets	99,589	98,318	67,381
Administrative expenses [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Amortisation expense of intangible assets	5,689	4,856	3,002
Discontinued operations [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Amortisation expense of intangible assets	S/ 0	S/ 8,898	S/ 16,174

XML

Deferred Income Tax -Summary Of Tax Loss Carry forward (Parenthetical) (Detail)	12 Months Ended
	Dec. 31, 2019
Disclosure Of Tax Loss Carryforwards [abstract]
Tax loss offset period from the date the loss is incurred	0 days
Tax loss offset, percentage of net rent	50.00%

XML

Transactions with Related Parties and Joint Operators (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Disclosure of Transactions Between Related Parties

Major transactions between the Company and its related parties are summarized as follows:

	2017		2018		2019
Revenue from sales of goods and services:
- Joint operations		18,138		56,560		44,130
- Associates		3,367		1,704		108
		21,505		58,264		44,238
Purchase of goods and services:
- Joint operations		14,191		601		1,765
- Associates		2,776		2,130		—
		16,967		2,731		1,765

Summary of Sale Purchase of Goods Services

c) Balances at the end of the year were:

	At December 31,				At December 31,
	2018				2019
	Receivable		Payable		Receivable		Payable
Current portion:
Joint operations
Consorcio Rio Urubamba		9,122		—		9,042		—
Consorcio Peruano de Conservacion		6,417		—		3,592		—
Consorcio Italo Peruano		3,322		4,996		1,011		363
Consorcio Constructor Chavimochic		2,138		6,199		—		5,953
Consorcio GyM Conciviles		1,855		—		1,257		1,958
Consorcio La Gloria		1,369		1,006		1,750		1,017
Consorcio Ermitaño		781		624		831		440
Consorcio Terminales del Peru S.A.		459		—		1,176		—
Consorcio TNT Vial y Vives - DSD Chile Ltda		—		11,804		—		1,088
Consorcio Rio Mantaro		—		6,655		—		5,869
Consorcio Vial Quinua		—		1,970		—		2,048
Consorcio Huacho Pativilca		—		475		1,419		5,895
Consorcio CDEM		—		—		638		—
Consorcio GyM-Stracon		—		—		2,230		—
Consorcio GyM-OSSA		—		—		7,202		—
Consorcio Chicama Ascope		—		—		2,471		—
Other minors		9,215		11,323		1,407		2,102
		34,678		45,052		34,026		26,733
Other related parties
Ferrovías Argentina		—		10,242		—		12,183
Perú Piping Spools S.A.C.		225		—		2,632		—
Other minors		—		647		—		—
		225		10,889		2,632		12,183
Current portion		34,903		55,941		36,658		38,916
Non-current portion
Gasoducto Sur Peruano S.A.		773,927		—		544,842		—
Ferrovías Participaciones		—		21,849		—		22,583
Other minors		4,299		—		2,099		—
Non-current		778,226		21,849		546,941		22,583

XML

Costs And Expenses by nature - Summary of impairment of accounts receivable (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure Of Impairment Of Accounts Receivable [line items]
Impairment of accounts receivable	S/ 4,900	S/ 65,076	S/ 19,109
Trade receivables [member]
Disclosure Of Impairment Of Accounts Receivable [line items]
Impairment of accounts receivable	955	3,065	724
Other accounts receivable [member]
Disclosure Of Impairment Of Accounts Receivable [line items]
Impairment of accounts receivable	2,421	44,252
Trade receivables and due from related parties [member]
Disclosure Of Impairment Of Accounts Receivable [line items]
Impairment of accounts receivable	S/ 1,524	S/ 17,759	S/ 18,385

XML

Loss Per Share - Summary of Basic Earnings Per Share (Detail) - PEN (S/) S/ / shares in Units, S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Earnings per share [abstract]
Loss attributable to owners of the Company during the year	S/ (884,721)	S/ (83,188)	S/ 148,738
Weighted average number of shares in issue at S/1.00 each, at December 31,	822,213,119	665,835,490	660,053,790
Basic loss per share (in S/)	S/ (1.076)	S/ (0.125)	S/ 0.225
Loss from continuing operations attributable to owners of the Company during the year	S/ (840,762)	S/ (65,888)	S/ (66,577)
Weighted average number of shares in issue at S/1.00 each, at December 31,	822,213,119	665,835,490	660,053,790
Basic loss per share (S/)	S/ (1.023)	S/ (0.099)	S/ (0.101)

XML

Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Financial Assets and Liabilities by Category

The classification of financial assets and liabilities by category is as follows:

	At December, 31
	2018		2019
Financial assets according to the statement of financial position
Loans and accounts receivable at amortized cost:
- Cash and cash equivalents		801,140		948,978
- Trade accounts receivable and other accounts receivable (excluding financial assets)		1,302,358		1,258,476
- Financial assets related to concession agreements		1,227,994		748,365
- Accounts receivable from related parties		813,129		36,658
		4,144,621		2,992,477

Financial assets related to concession agreements are recorded in the consolidated statement of financial position as the line items short-term trade accounts receivable and long-term trade accounts receivable.

	At December, 31
	2018		2019
Financial liabilities according to the statement of financial position
Other financial liabilities at amortized cost:
- Other financial liabilities		1,169,184		695,870
- Finance leases		33,488		22,980
- Lease liability for right-of-use asset		—		80,216
- Bonds		937,042		924,042
- Trade and other accounts payable (excluding non-financial liabilities)		1,453,933		1,364,131
- Accounts payable to related parties		77,790		61,499
		3,671,437		3,148,738
Hedging derivatives:
- Derivative financial instruments		61		52

Summary of Credit Quality of Financial Assets

	At December 31,
	2018		2019
Cash and cash equivalents (*)
Banco de Credito del Peru (A+)		350,403		302,743
Banco Continental (A+)		114,067		186,238
Citibank (A)		134,990		183,719
Banco Scotiabank (A+)		73,039		64,101
Banco de la Nacion (A)		23,766		56,085
Credicorp Capital Colombia (AAA)		—		44,338
Banco Interbank (A)		14,075		41,681
JP Morgan (AAA)		257		17,853
Santander Colombia (AAA)		—		15,183
Banco Scotiabank - Chile (A+)		—		9,801
Banco Bogota (BB+)		16,782		7,255
Banco Santander - Chile (AAA)		3,325		5,817
Banco Santander - Perú (A)		12,221		114
Fondo de Inversion Alianza (AA+)		39,051		46
Banco de crédito e Inversiones - Chile (AA+)		5,909		—
Others		8,312		7,017
		796,197		941,991

Summary of Credit Quality of Customers

	2018		2019
Trade accounts receivable (Note 10)
Counterparties with no external risk rating
A		302,369		58,999
B		1,579,400		1,373,424
C		146,126		142,516
		2,027,895		1,574,939
Receivable from related parties and joint operators (Note 12)
B		813,129		583,599

XML

Borrowings - Summary of Finance Lease Obligations (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Disclosure of finance lease and operating lease by lessor [line items]
Current finance lease liabilities	S/ 9,749	S/ 13,514
Non-current finance lease liabilities	S/ 13,231	19,974
Viva GyM S.A. [member]
Disclosure of finance lease and operating lease by lessor [line items]
Date of maturity	2023
Current finance lease liabilities	S/ 4,297	3,488
Non-current finance lease liabilities	S/ 7,399	8,582
GyM S.A. [member]
Disclosure of finance lease and operating lease by lessor [line items]
Date of maturity	2023
Current finance lease liabilities	S/ 3,395	4,523
Non-current finance lease liabilities	S/ 5,678	9,314
GMP S.A. [member]
Disclosure of finance lease and operating lease by lessor [line items]
Date of maturity	2022
Current finance lease liabilities	S/ 1,511	4,034
Non-current finance lease liabilities	S/ 154	1,522
Concar S.A. [member]
Disclosure of finance lease and operating lease by lessor [line items]
Date of maturity	2020
Current finance lease liabilities	S/ 546	1,469
Non-current finance lease liabilities		S/ 556
Bottom of range [member] | Viva GyM S.A. [member]
Disclosure of finance lease and operating lease by lessor [line items]
Interest rate	7.79%
Bottom of range [member] | GyM S.A. [member]
Disclosure of finance lease and operating lease by lessor [line items]
Interest rate	1.98%
Bottom of range [member] | GMP S.A. [member]
Disclosure of finance lease and operating lease by lessor [line items]
Interest rate	4.02%
Bottom of range [member] | Concar S.A. [member]
Disclosure of finance lease and operating lease by lessor [line items]
Interest rate	4.30%
Top of range [member] | Viva GyM S.A. [member]
Disclosure of finance lease and operating lease by lessor [line items]
Interest rate	9.04%
Top of range [member] | GyM S.A. [member]
Disclosure of finance lease and operating lease by lessor [line items]
Interest rate	9.07%
Top of range [member] | GMP S.A. [member]
Disclosure of finance lease and operating lease by lessor [line items]
Interest rate	6.28%
Top of range [member] | Concar S.A. [member]
Disclosure of finance lease and operating lease by lessor [line items]
Interest rate	5.05%

XML

Trade Accounts Payable - Summary of invoices payable (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure Of Trade Accounts Payable [Line Items]
Invoices payable	S/ 352,287	S/ 591,619
Infrastructure [member]
Disclosure Of Trade Accounts Payable [Line Items]
Invoices payable	78,188	203,051
Infrastructure [member] | Linea 1 - Metro de Lima [member]
Disclosure Of Trade Accounts Payable [Line Items]
Invoices payable	15,125	93,463
Infrastructure [member] | Oil Services [member]
Disclosure Of Trade Accounts Payable [Line Items]
Invoices payable	46,932	49,254
Infrastructure [member] | Operation and maintenance - Roads [member]
Disclosure Of Trade Accounts Payable [Line Items]
Invoices payable	16,131	60,334
Engineering and Construction [member]
Disclosure Of Trade Accounts Payable [Line Items]
Invoices payable	228,123	327,701
Engineering and Construction [member] | Works and Consortiums [member]
Disclosure Of Trade Accounts Payable [Line Items]
Invoices payable	64,571	128,159
Engineering and Construction [member] | Talara Refinery [member]
Disclosure Of Trade Accounts Payable [Line Items]
Invoices payable	59,740	101,103
Engineering and Construction [member] | Engineering and Construction Works VYV - DSD Chile Ltda. [member]
Disclosure Of Trade Accounts Payable [Line Items]
Invoices payable	26,368	26,184
Engineering and Construction [member] | Civil Works, Assembly and Electromechanics - Toquepala [member]
Disclosure Of Trade Accounts Payable [Line Items]
Invoices payable	10,325	23,957
Engineering and Construction [member] | North Concentrator Plant - Quellaveco [member]
Disclosure Of Trade Accounts Payable [Line Items]
Invoices payable	26,589	7,564
Engineering and Construction [member] | Engineering and Construction Works - Morelco S.A.S. [member]
Disclosure Of Trade Accounts Payable [Line Items]
Invoices payable	8,141	19,504
Engineering and Construction [member] | Generating Plant Machu Picchu [member]
Disclosure Of Trade Accounts Payable [Line Items]
Invoices payable	6,575	7,789
Engineering and Construction [member] | Project Mina Gold Fields La Cima S.A. [member]
Disclosure Of Trade Accounts Payable [Line Items]
Invoices payable	5,302	5,060
Engineering and Construction [member] | Civil works, assembly and electromechanics—Acero Arequipa [member]
Disclosure Of Trade Accounts Payable [Line Items]
Invoices payable	5,421	3,062
Engineering and Construction [member] | Others [member]
Disclosure Of Trade Accounts Payable [Line Items]
Invoices payable	15,091	5,319
Real Estate [member]
Disclosure Of Trade Accounts Payable [Line Items]
Invoices payable	26,072	18,365
Parent company operation [member]
Disclosure Of Trade Accounts Payable [Line Items]
Invoices payable	S/ 19,904	S/ 42,502

XML

Deferred Income Tax - Summary of Deferred Income Tax (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure of deferred income taxes [line items]
Deferred income tax asset	S/ 240,919	S/ 425,436
Deferred income tax liability	(112,734)	(75,347)
Deferred income tax asset, net	128,185	350,089	S/ 364,225	S/ 353,839
Up to 1 year [member]
Disclosure of deferred income taxes [line items]
Deferred income tax asset	37,927	48,889
Deferred income tax liability	(19,791)	(9,067)
Later than one year [member]
Disclosure of deferred income taxes [line items]
Deferred income tax asset	202,992	376,547
Deferred income tax liability	S/ (92,943)	S/ (66,280)

XML

Discountinued Operations and Non-current Asset Classified as Held for Sale

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Discountinued Operations and Non-current Asset Classified as Held for Sale

36 DISCONTINUED OPERATIONS AND NON-CURRENT ASSET CLASSIFIED AS HELD FOR SALE

As part of the non-strategic asset divestment process initiated by the Company, in 2017, GMD S.A. was sold (“completed”), and in 2018, CAM Servicios del Peru S.A. and CAM Chile S.A., and Stracon GyM S.A. were sold (“completed”).

Additionally, information is presented on Adexus S.A., a subsidiary that has been reclassified as a non-current asset available for sale (“planned”) as of December 31, 2017, 2018 and 2019.

Below is the information on the financial result and cash flow from discontinued operations, GMD S.A., Stracon GyM S.A., CAM Servicios del Peru S.A., CAM Chile S.A. (done) and Adexus S.A. (planned):

	Discontinued operations
	At December 31,
	2017						2018						2019
	GMD Grupo CAM and Stracon GyM			Adexus S.A.			Grupo CAM and Stracon GyM			Adexus S.A.			Adexus S.A.
	(Completed)			(Planned)			(Completed)			(Planned)			(Planned)
Revenues		1,894,055			284,024			1,010,739			302,936			252,857
Operating costs		(1,751,317	)		(239,680	)		(968,375	)		(263,455	)		(244,183	)
Gross profit		142,738			44,344			42,364			39,481			8,674
Administrative expenses		(83,483	)		(32,761	)		(56,950	)		(32,730	)		(34,744	)
Other (expenses) income, net		13,279			(835	)		860			(4,519	)		(12,740	)
Gain from the sale of investments		21,554			—			—			—			—
Operating (loss) profit		94,088			10,748			(13,726	)		2,232			(38,810	)
Financial expenses		(27,398	)		(10,755	)		(19,971	)		(12,786	)		(24,359	)
Financial income		2,269			264			6,253			610			2,625
Share of the profit or loss in associates and joint ventures		854
Loss before income tax		69,813			257			(27,444	)		(9,944	)		(60,544	)
Income tax		(14,110	)		147			7,112			2,325			16,585
Loss from discontinued operations (a)		55,703			404			(20,332	)		(7,619	)		(43,959	)
Details of the sale of the subsidiary
Revenues from the sale of investments		269,961			—			310,855			—			—
Cost from the sale of investments		(51,697	)		—			(237,213	)		—			—
Income tax expense on gain		(63,940	)		—			(8,906	)		—			—
Gain on sale after income tax (b)		154,324			—			64,736			—			—
Net effect in consolidated (a) + (b)		210,027			404			44,404			(7,619	)		(43,959	)
Cash flows relating to the discontinued operations are as follows:
Operating cash flows		149,687			6,083			6,967			36,450			437
Investing cash flows		(10,377	)		(19,570	)		(11,474	)		(18,141	)		—
Financing cash flows		(136,165	)		14,059			526			(21,422	)		(1,250	)
Net increase generated in subsidiary		3,145			572			(3,981	)		(3,113	)		(813	)

A. Discontinued operations

i) CAM Servicios del Peru S.A. and CAM Chile S.A.

On December 4, 2018, the Company entered into a purchase and sale agreement for all of its shares (representing 73.16%) of CAM Servicios del Peru S.A. and CAM Chile S.A. The Group received for its participation in CAM Chile S.A. and CAM Servicios del Peru S.A. the sum of (i) US$15.78 million (equivalent to S/51.7 million) for the shares of CAM Chile S.A. and (ii) US$3.0 million (equivalent to S/10.4 million) for the shares of CAM Servicios del Peru S.A., respectively. The net gain on the sale of both subsidiaries amounted to S/31.7 million.

ii) Stracon GyM S.A.

On March 28, 2018, the Company entered into a purchase and sale agreement for all of its shares (representing 87.59%) in Stracon GyM S.A. The sale price was agreed in US$76.8 million (equivalent to S/248.8 million), which is fully paid. The net gain on the sale amounted to S/41.9 million.

iii) GMD S.A.

On June 6, 2017, the Company entered into a sales contract for all of its shares (representing 89.19%) in GMD S.A. The sales price was agreed at US$84.7 million (equivalent to S/269.9 million), which is fully paid. The net gain on the sale amounted to S/218.3 million (US$64.6 million approximately).

B. Non-current asset classified as held for sale

At December 31, 2018 and 2019, non-current assets and liabilities held for sale correspond to investments in the company Adexus S.A. (hereinafter Adexus), whose main activity is to provide information technology solutions mainly in Chile and Peru.

On November 19, 2019, Adexus S.A. filed an application for reorganization under Law 20.720 with the Chilean courts of justice. The Company impaired the total investment value as of December 31, 2019.

The reorganization allows companies with temporary liquidity problems to obtain financial protection for a period of 30 days, extendable for a period of 60 days, with the support of their creditors, to prepare, propose and negotiate a plan to restructure their assets and liabilities.

Although the Company investment in Adexus has been declared as an available-for-sale investment and on an exceptional basis, the Group decided that Adexus will be subject to the patrimonial protection law; after achieving this restructuring, the Group will focus on honoring it in the terms agreed while finding the right shareholder for the future development of the Company.

	At December 31,
	2018		2019
ASSETS
Cash and cash equivalets		6,074		1,723
Accounts receivables, net		157,351		129,739
Inventories, net		3,999		2,828
Other assets, net		80,374		68,730
Total assets		247,798		203,020
LIABILITIES
Borrowings		71,810		91,529
Accounts payable		148,817		118,497
Deferred income tax liabilities		5,201		—
Total liabilities		225,828		210,026
Total net assets		21,970		(7,006	)

As of December 31, 2017, this item includes Red Eagle Mining Corporation investment representing 6.18% of shares. In January and March 2018, the Company sold the total of its shares. The sale price was agreed at US$3.99 million (equivalent to S/16.24 million), which were paid in full.

XML

Other Provisions - Additional Information (Detail) S/ in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2019 PEN (S/)	Dec. 31, 2018 PEN (S/)	Dec. 31, 2019 USD ($)	Dec. 31, 2017 PEN (S/)	Dec. 31, 2016 PEN (S/)
Disclosure of other provisions [line items]
Other provisions	S/ 328,435	S/ 109,608	$ 5	S/ 47,417	S/ 41,073
Legal proceedings provision [member]
Disclosure of other provisions [line items]
Present value of the estimated provision	154,000	73,500
Other provisions	278,319	S/ 84,728		S/ 23,364	S/ 15,732
Termination of the Legal class action | $			20
Legal proceedings provision [member] | GyM S.A. [member]
Disclosure of other provisions [line items]
Other provisions	46,000
Professional Liability [member].
Disclosure of other provisions [line items]
Other provisions	S/ 49,800		$ 15

XML

Standards, Amendments and Interpretation Adopted in 2019 (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Details aboout IFRS 16 effect in Group financial statement

At the end of 2019, the Group’s companies with the most representative balances were GMP S.A. (S/24 million) and Graña y Montero S.A.A. (S/54 million).

Impact on liabilities	At December 31, 2019
Impact of implementation 2019		97,706
Adjustments on contract fees		4,039
Addition of liabilities for right-of-use		101,745
Accrued interest		5,617
Amortization		(20,326	)
Interest paid		(5,368	)
Foreign currency translation effect		(11	)
Exchange difference		(1,441	)
Impact on liabilities		80,216
Short-term liabilities for right-of-use		18,246
Long-term liabilities for right-of-use		61,970
Impact on liabilities (Note 18)		80,216

Summary of lease liabilities

At December 31, 2019, the effect of IFRS 16 in the Group’s financial statements is detailed as follows:

Impact on assets	At December 31, 2019
Right-of-use
Right-of-use buildings		59,599
Right-of-use vehicles		20,211
Right-of-use machinery		17,896
Impact of implementation 2019		97,706
Adjustments on contract fees		4,039
Total right-of-use assets		101,745
Cumulative depreciation		(22,958	)
Foreign currency translation effect		26
Impact on assets (Note 16.2)		78,813

XML

Bonds - Summary of Bonds Issued (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about borrowings [line items]
Total	S/ 924,042	S/ 937,042
Current	44,737	39,167
Non-current	879,305	897,875
GyM Ferrovias S.A. [member]
Disclosure of detailed information about borrowings [line items]
Total	618,497	611,660	S/ 603,657	S/ 604,031
Current	15,742	13,422
Non-current	602,755	598,238
Norvial S.A. [member]
Disclosure of detailed information about borrowings [line items]
Total	305,545	325,382	S/ 343,910	S/ 363,684
Current	28,995	25,745
Non-current	S/ 276,550	S/ 299,637

XML

Discontinued Operations - Summary of Financial Performance and Cash Flow Information (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure Of Financial Performance And Cash Flow Information [line items]
Revenues	S/ 4,085,004	S/ 3,899,462	S/ 4,014,013
Administrative expenses	(213,908)	(278,433)	(322,454)
Other (expenses) income, net	(326,754)	(61,335)	(32,869)
Gain from the sale of investments		(7)	34,545
Operating (loss) profit	(98,899)	334,714	181,674
Financial expenses	(231,709)	(247,982)	(150,777)
Financial income	74,656	50,925	13,742
Share of the profit or loss in associates and joint ventures	(218,774)	(3,709)	473
Loss before income tax	(474,726)	133,948	45,112
Income tax	319,957	113,318	46,305
Loss from discontinued operations	(43,959)	36,785	210,431
Discontinued operations [member] | Adexus S.A. [member]
Disclosure Of Financial Performance And Cash Flow Information [line items]
Revenues	252,857	302,936	284,024
Operating costs	(244,183)	(263,455)	(239,680)
Gross profit	8,674	39,481	44,344
Administrative expenses	(34,744)	(32,730)	(32,761)
Other (expenses) income, net	(12,740)	(4,519)	(835)
Operating (loss) profit	(38,810)	2,232	10,748
Financial expenses	(24,359)	(12,786)	(10,755)
Financial income	2,625	610	264
Loss before income tax	(60,544)	(9,944)	257
Income tax	16,585	2,325	147
Loss from discontinued operations	(43,959)	(7,619)	404
Net effect in consolidated	(43,959)	(7,619)	404
Cash flows relating to the discontinued operations are as follows:
Operating cash flows	437	36,450	6,083
Investing cash flows		(18,141)	(19,570)
Financing cash flows	(1,250)	(21,422)	14,059
Net increase generated in subsidiary	S/ (813)	(3,113)	572
Discontinued operations [member] | Grupo Cam and Stracon Gym [member]
Disclosure Of Financial Performance And Cash Flow Information [line items]
Revenues		1,010,739	1,894,055
Operating costs		(968,375)	(1,751,317)
Gross profit		42,364	142,738
Administrative expenses		(56,950)	(83,483)
Other (expenses) income, net		860	13,279
Gain from the sale of investments			21,554
Operating (loss) profit		(13,726)	94,088
Financial expenses		(19,971)	(27,398)
Financial income		6,253	2,269
Share of the profit or loss in associates and joint ventures			854
Loss before income tax		(27,444)	69,813
Income tax		7,112	(14,110)
Loss from discontinued operations		(20,332)	55,703
Revenues from the sale of investments		310,855	269,961
Cost from the sale of investments		(237,213)	(51,697)
Income tax expense on gain		(8,906)	(63,940)
Gain on sale after income tax		64,736	154,324
Net effect in consolidated		44,404	210,027
Cash flows relating to the discontinued operations are as follows:
Operating cash flows		6,967	149,687
Investing cash flows		(11,474)	(10,377)
Financing cash flows		526	(136,165)
Net increase generated in subsidiary		S/ (3,981)	S/ 3,145

XML

Property, Plant And Equipment, Net And Right-Of-Use Assets - Additional Information (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of detailed information about property, plant and equipment [line items]
Work in progress	S/ 49,457	S/ 28,538
Proceeds from sale of fixed assets	12,700	31,900	S/ 127,200
Gain (loss) from fixed assets	6,100	(7,100)	26,900
Fully depreciated property, plant and equipment	319,200	424,500	154,000
Lease Expense under 12 months	167,300
Lease Expense of Low Value Assets	7,000
Variable Lease Payments	600
Property, plant and equipment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Other financial liabilities	111,900	162,900	368,100
GMP S.A. [member]
Disclosure of detailed information about property, plant and equipment [line items]
Work in progress	S/ 15,200	17,300	11,000
Larcomar Hotel Project [member]
Disclosure of detailed information about property, plant and equipment [line items]
Work in progress		S/ 15,800	S/ 15,600

XML

Interests in Other Entities - Summary of Principal Direct and Indirect Subsidiaries Classified by Operating Segment (Detail)	12 Months Ended
	Dec. 31, 2019
Engineering and Construction [member] | GyM S.A. [member]
Disclosure of subsidiaries [line items]
Name	GyM S.A.
Country	Peru, and Colombia
Economic activity	Civil construction, electro-mechanic assembly, buildings management and implementing housing development projects and other related services.
Engineering and Construction [member] | GyM Chile S.p.A. [member]
Disclosure of subsidiaries [line items]
Name	GyM Chile S.p.A.
Country	Chile
Economic activity	Investment funds, investment companies and similar financial entities.
Engineering and Construction [member] | Vial y Vives-DSD S.A. [member]
Disclosure of subsidiaries [line items]
Name	Vial y Vives - DSD S.A.
Country	Chile
Economic activity	Construction engineering projects, civil construction and related technical consultancy, rental of agricultural machinery and equipment, forestry, construction and civil engineering without operator.
Engineering and Construction [member] | GMI S.A. [member]
Disclosure of subsidiaries [line items]
Name	GMI S.A.
Country	Peru, Mexico, and Bolivia
Economic activity	Advisory and consultancy services in engineering, carrying out studies and projects, managing projects and supervision of works.
Engineering and Construction [member] | Morelco S.A.S. [member]
Disclosure of subsidiaries [line items]
Name	Morelco S.A.S.
Country	Colombia and Ecuador
Economic activity	Providing construction and assembly services, supply of equipment and materials, operation and maintenance and engineering services in the specialties of mechanics, instrumentation and civil works.
Infrastructure [member] | GMP S.A. [member]
Disclosure of subsidiaries [line items]
Name	GMP S.A.
Country	Peru
Economic activity	Oil and oil by-products extraction, operation and exploration services, as well as providing storage and fuel dispatch services.
Infrastructure [member] | Oiltanking Andina Services S.A. [member]
Disclosure of subsidiaries [line items]
Name	Oiltanking Andina Services S.A.
Country	Peru
Economic activity	Operation of the gas processing plant of Pisco - Camisea.
Infrastructure [member] | Transportadora de Gas Natural Comprimido Andino S.A.C. [member]
Disclosure of subsidiaries [line items]
Name	Transportadora de Gas Natural Comprimido Andino S.A.C.
Country	Peru
Economic activity	Supply, process and market natural gas and its derivative products.
Infrastructure [member] | Concar S.A. [member]
Disclosure of subsidiaries [line items]
Name	Concar S.A.
Country	Peru
Economic activity	Highway and roads concessions operation and maintenance.
Infrastructure [member] | GyM Ferrovias S.A. [member]
Disclosure of subsidiaries [line items]
Name	GyM Ferrovias S.A.
Country	Peru
Economic activity	Concession for the operation of the public transportation system of Lima Metro (Metro de Lima Metropolitana).
Infrastructure [member] | Survial S.A. [member]
Disclosure of subsidiaries [line items]
Name	Survial S.A.
Country	Peru
Economic activity	Concession for constructing, operating and maintaining Section 1 of the “Southern Inter-oceanic” highway.
Infrastructure [member] | Norvial S.A. [member]
Disclosure of subsidiaries [line items]
Name	Norvial S.A.
Country	Peru
Economic activity	Concession for restoring, operating and maintaining the “Ancon - Huacho - Pativilca” section of the Panamericana Norte road.
Infrastructure [member] | Concesin Canchaque S.A. [member]
Disclosure of subsidiaries [line items]
Name	Concesion Canchaque S.A.C.
Country	Peru
Economic activity	Concession for operating and maintaining of the Buenos Aires – Canchaque provincial road highway.
Infrastructure [member] | Concesionaria Vía Expresa Sur S.A. [member]
Disclosure of subsidiaries [line items]
Name	Concesionaria Via Expresa Sur S.A.
Country	Peru
Economic activity	Concession for designing, constructing, operating and maintaining the Via Expresa - Paseo de la Republica in Lima.
Real estate [member] | Viva GyM S.A. [member]
Disclosure of subsidiaries [line items]
Name	VIVA GyM S.A.
Country	Peru
Economic activity	Developing and managing real estate projects directly or together with other partners.
Parent company operation [member] | Adexus S.A. [member]
Disclosure of subsidiaries [line items]
Name	Adexus S.A.
Country	Chile, Peru, Colombia and Ecuador
Economic activity	IT solutions services.
Parent company operation [member] | CAM Holding S.p.A. [member]
Disclosure of subsidiaries [line items]
Name	CAM Holding S.p.A.
Country	Chile
Economic activity	Investment company.
Parent company operation [member] | Qualys S.A. [Member]
Disclosure of subsidiaries [line items]
Name	Qualys S.A.
Country	Peru
Economic activity	Human, economic and technological services to the Group’s companies.
Parent company operation [member] | Promotora Larcomar S.A. [member]
Disclosure of subsidiaries [line items]
Name	Promotora Larcomar S.A.
Country	Peru
Economic activity	Building a hotel complex on a plot of land located in the district of Miraflores.
Parent company operation [member] | Promotores Asociados de Inmobiliarias S.A. [member]
Disclosure of subsidiaries [line items]
Name	Promotores Asociados de Inmobiliarias S.A.
Country	Peru
Economic activity	Operating in the real-estate industry and engaged in the development and sale of office premises in Peru.
Parent company operation [member] | Negocios del Gas S.A. [member]
Disclosure of subsidiaries [line items]
Name	Negocios del Gas S.A.
Country	Peru
Economic activity	Investment company for construction, operation, and maintenance of the pipeline system to transport natural gas and liquids.
Parent company operation [member] | Inversiones en Autopistas S.A.[member]
Disclosure of subsidiaries [line items]
Name	Inversiones en Autopistas S.A.
Country	Peru
Economic activity	Holding company of shares, participation or any other credit instrument or investment document.

XML

Other Provisions (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Provisions

At December 31, this item includes:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Legal contingencies		84,728		278,319		6,049		103,635		78,679		174,684
Contingent liabilities from the acquisition of subsidiaries		4,498		—		—		—		4,498		—
Provision for well closure (Note 5.1 d)		20,382		50,116		148		9,848		20,234		40,268
		109,608		328,435		6,197		113,483		103,411		214,952

Summary Gross Movement of Other Provisions

The gross movement of other provisions is as follows:

Other provisions	Legal contingencies			Contingent liabilities resulting from acquisitions			Provision for well closure			Total
At January 1, 2017		15,732			8,125			17,216			41,073
Additions		9,510			—			—			9,510
Reversals of provisions		(235	)		(809	)		(412	)		(1,456	)
Payments		(1,680	)		—			—			(1,680	)
Translation adjustments		37			(67	)		—			(30	)
At December 31, 2017		23,364			7,249			16,804			47,417
Additions		75,369			—			3,578			78,947
Reversals of provisions		(4,875	)		(1,343	)		—			(6,218	)
Deconsolidation of subsidiaries		(2,340	)		—			—			(2,340	)
Reclasification liabilities classified as held for sale		—			(1,093	)		—			(1,093	)
Payments		(6,615	)		—			—			(6,615	)
Translation adjustments		(175	)		(315	)		—			(490	)
At December 31, 2018		84,728			4,498			20,382			109,608
Additions		197,721			—			30,998			228,719
Reversals of provisions		(3,122	)		(4,349	)		—			(7,471	)
Payments		(914	)		—			(1,264	)		(2,178	)
Translation adjustments		(94	)		(149	)		—			(243	)
At December 31, 2019		278,319			—			50,116			328,435

XML

Borrowings (Tables)

12 Months Ended

Dec. 31, 2019

Statement [line items]

Summary of Other Financial Liabilities

As of December 31, this item includes:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Bank overdrafts (Note 9)		119		—		119		—		—		—
Bank loans (a)		1,023,481		553,658		810,188		424,362		213,293		129,296
Finance leases (b)		33,488		22,980		13,514		9,749		19,974		13,231
Lease liability for right-of-use asset (c)		—		80,216		—		18,246		—		61,970
Other financial entities (d)		145,584		142,212		2,653		1,903		142,931		140,309
		1,202,672		799,066		826,474		454,260		376,198		344,806

Summary of Bank Loan

As of December 31, 2018, and 2019 includes bank loans in local and foreign currency for working capital. These obligations bear fixed interest rates ranging from 1.6% to 15.8% in 2018 and from 1.0% to 12.0% in 2019.

				Current						Non-current
	Interest	Date of		At December, 31						At December, 31
	rate	maturity		2018			2019			2018			2019
GyM S.A.	1.00% / 11.00%		2022		227,770			170,798	(iii)		—			26,401
Graña y Montero S.A.A.	9.10% / 10.10%		2022		206,836	(ii)		112,854	(iv)		125,547	(i)		—
Viva GyM S.A.	7.00% / 12.00%		2020		129,617			110,343			2,102			—
GMP S.A.	5.05% / 6.04%		2026		22,587			30,367			85,644			102,895
GyM Ferrovías S.A.	Libor USD 1M + 2%		2019		209,463			—			—			—
Concar S.A.	15.75%		2019		13,915			—			—			—
					810,188			424,362			213,293			129,296

Summary of Finance Lease Obligations

					Current				Non-current
	Interest		Date of		At December, 31				At December, 31
	rate		maturity		2018		2019		2018		2019
Viva GyM S.A.		7.79% / 9.04%		2023		3,488		4,297		8,582		7,399
GyM S.A.		1.98% / 9.07%		2023		4,523		3,395		9,314		5,678
GMP S.A.		4.02% / 6.28%		2022		4,034		1,511		1,522		154
Concar S.A.		4.30% / 5.05%		2020		1,469		546		556		—
						13,514		9,749		19,974		13,231

Summary of Minimum Payment by Maturity and Present Value of Finance Lease Obligations

The minimum payments to be made according to their maturity and the present value of the leasing obligations are as follows:

	At December 31,
	2018			2019
Up to 1 year		15,151			10,826
From 1 to 5 years		21,583			16,813
		36,734			27,639
Future financial charges		(3,246	)		(4,659	)
Present value of the obligations for finance lease contracts		33,488			22,980

Summary of Lease Liability for Right-of-use Asset

c) Lease liability for right-of-use asset (Note 3.1)

						At December, 31
	Interest			Date of		2019
	rate			maturity		Current		Non-current
GMP S.A.		6.59% / 7.80	%		2023		10,584		10,261
Graña y Montero S.A.A.		7.88	%		2027		4,888		50,362
GyM S.A.		7.65	%		2022		1,592		541
Concar S.A.		5.55	%		2024		1,171		806
Other minors		6.31% / 10.00	%		2020		11		—
							18,246		61,970

Summary of Minimum Payment by Maturity and the Present Value of the Lease Liability for Right-of-use Asset Obligations

The minimum payments to be made according to their maturity and the present value of the lease liability for right-of-use asset obligations are as follows:

	At December 31, 2019
Up to 1 year		24,966
From 1 to 5 years		69,955
Over 5 years		7,603
		102,524
Future financial charges		(22,308	)
Present value of the lease liability for right-of-use asset obligations		80,216

Summary of Present Value of Lease Liability for Right-of-use Asset

The present value of the lease liability for right-of-use asset obligations are as follows:

	At December 31, 2019
Up to 1 year		18,246
From 1 year to 5 years		54,595
Over 5 years		7,375
		80,216

Summary of Carrying Amount and Fair Value of Borrowings

The book value and fair value of financial liabilities are as follows:

	Carrying amount				Fair value
	At December, 31				At December, 31
	2018		2019		2018		2019
Bank overdrafts		119		—		119		—
Bank loans		1,023,481		553,658		1,152,885		572,019
Finance leases		33,488		22,980		38,399		23,027
Lease liability for right-of-use asset		—		80,216		—		96,799
Other financial entities		145,584		142,212		145,584		142,212
		1,202,672		799,066		1,336,987		834,057

Obligations under finance leases [member]

Statement [line items]

Summary of Present value of Finance Lease Obligations

The present value of the finance lease agreements obligations are as follows:

	At December 31,
	2018		2019
Up to 1 year		13,514		9,749
From 1 year to 5 years		19,974		13,231
		33,488		22,980

XML

Property, Plant and Equipment, Net and Right-of-Use Assets - Summary of Distribution Expense For Depreciation Of Right-Of-Use Assets (Detail) S/ in Thousands	12 Months Ended
	Dec. 31, 2019 PEN (S/)
Disclosure Of Depreciation Of Right of use Assets [Line Items]
Depreciation, right-of-use assets	S/ 22,958
Cost of services and goods [member]
Disclosure Of Depreciation Of Right of use Assets [Line Items]
Depreciation, right-of-use assets	20,011
Administrative expenses [member]
Disclosure Of Depreciation Of Right of use Assets [Line Items]
Depreciation, right-of-use assets	S/ 2,947

XML

Financial Risk Management - Schedule of Assets and Liabilities Measured at Fair Value (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Financial liabilities
Derivatives used for hedging	S/ 1,723,108	S/ 2,139,714
Level 2 of fair value hierarchy [member] | Derivatives used for hedging [member]
Financial liabilities
Derivatives used for hedging	S/ 52	S/ 61

XML

Costs And Expenses by Nature (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Information about Expense by Nature

For the years ended December 31, the detail of this item is as follows:

	Cost of goods and services		Administrative expenses		Total
2017
Services provided by third-parties		1,268,665		104,950		1,373,615
Salaries, wages and fringe benefits (i)		919,409		134,695		1,054,104
Purchase of goods		856,745		140		856,885
Other management charges		235,102		48,057		283,159
Depreciation		103,566		5,776		109,342
Amortization		67,381		3,002		70,383
Impairment of inventories		40,592		—		40,592
Impairment of property, plant and equipment		11,928		20		11,948
Taxes		7,470		7,408		14,878
Impairment of accounts receivable (ii)		703		18,406		19,109
		3,511,561		322,454		3,834,015

	Cost of goods and services			Administrative expenses		Total
2018
Services provided by third-parties		1,064,687			98,060		1,162,747
Salaries, wages and fringe benefits (i)		817,392			105,505		922,897
Purchase of goods		755,209			—		755,209
Other management charges		375,308			43,533		418,841
Amortization		98,318			4,856		103,174
Depreciation		81,199			5,135		86,334
Impairment of accounts receivable (ii)		45,658			19,418		65,076
Taxes		8,727			1,926		10,653
Impairment of property, plant and equipment		5,468			—		5,468
Inventory recovery		(26,993	)		—		(26,993	)
		3,224,973			278,433		3,503,406

	Cost of goods and services			Administrative expenses		Total
2019
Services provided by third-parties		1,450,577			58,728		1,509,305
Salaries, wages and fringe benefits (i)		951,455			117,426		1,068,881
Purchase of goods		855,743			—		855,743
Other management charges		174,678			27,708		202,386
Amortization		99,589			5,689		105,278
Depreciation		95,445			1,907		97,352
Impairment of accounts receivable (ii)		4,900			—		4,900
Taxes		6,941			2,450		9,391
Impairment of property, plant and equipment		3,907			—		3,907
Impairment of investments		255			—		255
Inventory recovery		(249	)		—		(249	)
		3,643,241			213,908		3,857,149

Summary of Salaries, Wages and Fringe Benefits

(i) For the years ended on December 31, salaries, wages and fringe benefits comprise the following:

	2017		2018		2019
Salaries		747,195		629,641		786,346
Statutory gratification		106,797		80,697		88,369
Social contributions		76,330		73,297		61,533
Employee’s severance indemnities		43,399		50,852		49,944
Vacations		33,603		39,221		39,298
Workers’ profit sharing (Note 25)		9,777		7,862		6,340
Others		37,003		41,327		37,051
		1,054,104		922,897		1,068,881

Summary of impairment of accounts receivable

(ii) For the years ended December 31, the impairment of accounts receivable includes the following:

	2017		2018		2019
Trade accounts receivables		724		3,065		955
Other accounts receivable		—		44,252		2,421
Accounts receivable from related parties		18,385		17,759		1,524
		19,109		65,076		4,900

XML

General Information

12 Months Ended

Dec. 31, 2019

Text block [abstract]

General Information

1 GENERAL INFORMATION

a) Incorporation and operations

Graña y Montero S.A.A. (hereinafter the “Company”) was incorporated in Perú on August 12, 1996, as a result of the equity spin-off of Inversiones GyM S.A. (formerly Graña y Montero S.A.). The Company’s legal address is Av. Paseo de la República 4675, Surquillo Lima, Perú and is listed on the Lima Stock Exchange and the New York Stock Exchange (NYSE).

The Company is the parent of the Graña y Montero Group that includes the Company and its subsidiaries (hereinafter, the “Group”) and is mainly engaged in holding investments in different Group companies. Additionally, the Company provides services of general management, financial management, commercial management, legal advisory, human resources management and leases office space to the Group companies.

The Group is a conglomerate of companies with operations including different business activities, the most significant are engineering and construction, infrastructure (public concession ownership and operation) and real estate businesses. See details of operating segments in Note 7.

b) Authorization for the issue of the financial statements

The consolidated financial statements for the year ended December 31, 2019, have been prepared and issued with Management and Board of Directors’ authorization on March 5, 2020, and will be submitted for consideration and approval at the General Shareholders’ Meeting to be held within the term established by Peruvian law. Management expects that the consolidated financial statements as of December 31, 2019, will be approved with no changes.

c) Current situation of the Company

As a result of decisions of a previous administration, the Group is involved in a series of corruption cases mainly between 2004 and 2015, which have generated criminal investigations by the Prosecutor’s Office and administrative investigations by a regulatory body. Such situations led to organizational changes, external investigations, independent of the Company’s Management, related to the Group’s business with Odebrecht and the facts under criminal investigation, as well as other internal measures as explained below:

• On January 9, 2017, the Board of Directors approved the performance of an independent investigation related to six projects developed in association with companies of the Odebrecht Group.

• On March 30, 2017, the Board of Directors created a Risk, Compliance and Sustainability Committee, who was in charge of the oversight of the investigation independently of Management. The external investigation was undertaken by the law firm Simpson Thacher & Bartlett LLP, with the assistance of forensic accountants, who reported exclusively to the Risk, Compliance and Sustainability Committee.

• The external investigation concluded on November 2, 2017 and identified no evidence to conclude that any company personnel engaged in bribery in connection with any of our Company’s public projects in Peru with Odebrecht or its subsidiaries, or that any Company personnel was aware of, or knowingly participated in, any corrupt payments made in relation to such projects.

• Subsequently, in August 2019, José Graña Miró Quesada, a shareholder and the former chairman of our Company, indicated in public statements to the media that he and Hernando Graña Acuña, a shareholder and former board member of our Company and the former chairman of our subsidiary GyM, had initiated a process of plea bargaining to cooperate with Peruvian prosecutors in respect of multiple projects in which our Company participated with Odebrecht and in respect of the alleged “construction club.” According to news reports, in the plea bargaining process, José Graña and Hernando Graña may have provided information related to wrongdoing or knowledge of improper behavior while they were at the Company; however, given the confidential nature of these proceedings, the reported information is limited and difficult to verify. Any admission or other evidence of wrongdoing or knowledge by José Graña or Hernando Graña of improper behavior in respect of our participation in consortia with Odebrecht would be inconsistent with information gathered during the internal investigation and would have a material impact on the findings of the prior internal investigation.

• As new information about the various Peruvian criminal investigations of the Company emerged, and news that the Company’s former chairman and director were plea bargaining with Peruvian authorities, the Company’s Board of Directors continued to investigate the allegations that were the subject of the investigations, including matters relating to the “construction club,” which was beyond the scope of the internal investigation conducted by Simpson Thacher & Bartlett LLP. After an extensive and detailed review process, in line with its commitment to transparency and integrity, the Company shared information relevant to the investigations with the Peruvian authorities within the framework of a plea bargain process.

• As a result of its contribution to the investigations, on December 27, 2019, the Company signed a preliminary settlement and cooperation agreement whereby the Anti-Corruption Prosecutor and the Ad hoc Prosecutor’s Office promise to execute a final plea bargain agreement with the Company that would provide the Company with certainty regarding the contingencies it faces as a result of the above-mentioned processes. Additionally, in the aforementioned preliminary agreement, the Anti-Corruption Prosecutor and the Ad Hoc Attorney General’s Office authorize the Company to disclose its existence but maintain its content confidential.

At the same time, over the last three years, the new administration together with the new board initiated a transformation process based on the principles of Truth, Transparency and Integrity, making profound changes in the organization of the Company,such as the reconfiguration of the Board of Directors with an independent majority, new shareholding composition, as well as the creation of new governance practices, such as the Corporate Risk Management and autonomous Compliance function, with direct report to the Board of Directors, among other actions.

Criminal investigations derived from projects developed in partnership with companies of the Odebrecht group

In connection with the Lava Jato case, the Company participated directly or through its subsidiaries as minority partner in certain entities that developed six infrastructure projects in Peru with companies belonging to the Odebrecht group (hereinafter Odebrecht).

In 2016, Odebrecht entered into a Plea Agreement with the authorities of the United States Department of Justice and the Office of the District Attorney for the Eastern District of New York by which it admitted corruption acts in connection with some of these projects in which the Company participate as minority partner.

• IIRSA Sur

In relation to investigations on IIRSA Sur, the former Chairman of the Board of Directors was included as a subject of an investigation for collusion, and a former director and a former executive was included as a subject of an investigation for money laundering. Subsequently, Graña y Montero S.A.A. and GyM S.A. have been included as third-party civilians responsible in the process, which means that it will be assessed whether the obligation to indemnify the state for damages resulting from the facts under investigation will be imposed on these entities.

• Electric Train construction project

The first Preparatory Investigation Court of the Judiciary decided to incorporate GyM S.A. as civil third-party responsible in the process related to the construction of the Electric train construction Project, tranches 1 and 2. In this investigation the former Chairman of the Board, a former director and a former manager have been charged.

• Gasoducto Sur Peruano (GSP)

In 2019, the Company concluded that it may have exposure with respect to the preliminary investigation process conducted in relation to GSP (the South Peruvian Gas Pipeline project), even though as of the date hereof, it has not been indicted or incorporated as a civilly liable third-party, although the former Chairman of the Board of Directors and a former director are seeking plea bargain agreements in relation to this process, among others.

In addition to the cases described for which a provision for civil damages has been registered, there are two projects carried out in partnership with Odebrecht that are not currently under investigation. If an investigation is initiated and evidence of wrongdoing is found, the maximum possible civil damage exposure estimated under Law 30737 for both projects would be S/52.7 million (US$16 million approximately).

Criminal investigations in conection to the Construction Club case

GyM S.A. has been incorporated, along with other construction companies, in the criminal investigation that the Public Ministry has been carrying out for the alleged crime of corruption of officials in relation to the so-called Construction Club. Similarly, at the end of February 2020, the Public Ministry has requested the incorporation of Concar S.A., the latter is pending judicial decision.

Like officials of other construction companies, a former commercial manager of GyM S.A., the former president of the Board of Directors, a former director and the former Corporate General Manager of the company have been included in the criminal investigation.

Anticorruption Law - effects on the Group

Law 30737 and its regulation issued by Supreme Decree 096-2018-EF have mitigated the Company and subsidiaries exposure to the corruption cases. These rules set clear guidelines to estimate the potential compensation reducing the uncertainty derived from the legal proceedings, by among other things, preventing the imposition of liens or attachments of assets that would impair its ability to operate.

The benefits of the mentioned rules are subject to the fulfillment of the following obligations:

• The obligation to set up a trust that will guarantee any eventual payment obligation of an eventual civil compensation in favor of the Peruvian Government;

• The obligation not to transfer funds abroad without the prior consent of the Ministry of Justice;

• The implementation of a compliance program; and

• The obligation to disclose information to the authorities and to collaborate in the investigation.

The Group has designed a compliance program which is currently under implementation, it fully cooperates with the authorities in its investigations and has executed a trust agreement with the Ministry of Justice, under which the Company has established for an approximate amount of S/80 million (equivalent to US$24 million).

On the other hand, based on the standards indicated and their guidelines, Management has estimated that the value of the civil damages for the cases described above is S/280 million (US$85 million) and has registered as of December 31st, 2019 S/153.9 million (equivalent to US$46.6 million) as net present value (Note 22).

On the other hand, in cases where a provision for civil reparation has been registered, there are two projects carried out in partnership with Odebrecht that to date are not under investigation. If this is started and some evidence is found, the maximum possible exposure for civil reparation estimated according to Law 30737 for both projects would be S/52.7 million (approximately US$16 million).

However, the Company, through its external legal advisors, continues to conduct an ongoing evaluation of the information related to the criminal investigations described in this note in order to keep its defense prepared in the event any new charges may arise during those investigations. In conducting the aforementioned evaluation, the Company does not rule out the possibility of finding new incriminating evidence that is not known to date.

Investigations and administrative process initiated by INDECOPI in conection to the Construction Club case

On July 11, 2017, the Peruvian National Institute for the Defense of Free Competition and the Protection of Intellectual Property (“INDECOPI”) initiated an investigation against several construction companies, including GyM S.A., about the existence of an alleged cartel called the Construction Club.

Throughout the investigation, GyM S.A. has provided to INDECOPI with all the information requested and continues collaborating with the ongoing investigation.

On February 11, 2020, GyM S.A. was notified by the Technical Secretariat of the Commission for the Defense of Free Competition (“INDECOPI”) with the resolution that begins a sanctioning administrative procedure involving a total of 35 companies and 28 natural persons, for alleged anticompetitive conduct in the market of Public Works. The resolution does not include the assignment of responsibilities or the result of the administrative disciplinary procedure, which will be determined at the end of the said procedure. The procedure is in a probatory stage, therefore, INDECOPI has not carried out actions in order to quantifying the possible penalties that could result.

XML

Interests in Other Entities - Summarized Financial Information of Subsidiaries With Material Non-controlling Interests (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of summarized financial information [line items]
Assets	S/ 3,070,669	S/ 3,233,254
Liabilities	(2,680,846)	(2,891,614)
Assets	3,333,795	4,197,142	S/ 4,775,724
Liabilities	(1,847,533)	(2,048,851)
Revenue	4,085,004	3,899,462	4,014,013
Profit (loss) before income tax	(474,726)	133,948	45,112
Income tax expense	(319,957)	(113,318)	(46,305)
Profit (loss) for the period	(838,642)	57,415	209,238
Discontinued operations	(42,613)	63,736	206,348
Other comprehensive income	(8,620)	14,294	(8,280)
Total comprehensive income for the year	(847,262)	71,709	200,958
Net cash provided from operating activities	592,937	279,273	491,164
Net cash (applied to) provided from investing activities	(130,828)	137,855	348,870
Net cash (applied to) provided from financing activities	(293,849)	(299,923)	(777,661)
(Decrease) increase in cash and cash equivalents, net	168,260	117,205	62,373
Cash and cash equivalents at the beginning of the year	801,140	626,180
Cash and cash equivalents at the end of the year	948,978	801,140	626,180
Viva GyM S.A. and subsidiaries [member]
Disclosure of summarized financial information [line items]
Assets	591,402	720,976
Liabilities	(263,592)	(310,132)
Current net assets (liabilities)	327,810	410,844
Assets	121,529	98,504
Liabilities	(37,851)	(37,154)
Non-current net assets (liabilities)	83,678	61,350
Net assets	411,488	472,194
Revenue	264,401	630,130
Profit (loss) before income tax	30,729	226,945
Income tax expense	(7,000)	(69,166)
Profit (loss) for the period	23,729	157,779
Total comprehensive income for the year	23,729	157,779
Dividends paid to non-controlling interest (Note 35-d)		84,870
Net cash provided from operating activities	28,791	259,992
Net cash (applied to) provided from investing activities	(2,613)	(8,460)
Net cash (applied to) provided from financing activities	(58,722)	(255,979)
(Decrease) increase in cash and cash equivalents, net	(32,544)	(4,447)
Cash and cash equivalents at the beginning of the year	93,262	97,709
Cash and cash equivalents at the end of the year	60,718	93,262	97,709
GyM S.A. and subsidiaries [member]
Disclosure of summarized financial information [line items]
Assets	1,232,486	1,262,588
Liabilities	(1,491,747)	(1,467,953)
Current net assets (liabilities)	(259,261)	(205,365)
Assets	1,100,218	980,653
Liabilities	(486,924)	(413,026)
Non-current net assets (liabilities)	613,294	567,627
Net assets	354,033	362,262
Revenue	2,279,786	1,704,998
Profit (loss) before income tax	(116,081)	(154,452)
Income tax expense	(30,843)	18,559
Profit (loss) for the period	(146,924)	(135,893)
Discontinued operations		44,096
Other comprehensive income	(7,436)	(14,061)
Total comprehensive income for the year	(154,360)	(105,858)
Dividends paid to non-controlling interest (Note 35-d)		4,241
Net cash provided from operating activities	(25,502)	148,754
Net cash (applied to) provided from investing activities	(20,173)	233,150
Net cash (applied to) provided from financing activities	209,514	(388,836)
(Decrease) increase in cash and cash equivalents, net	163,839	(6,932)
Cash and cash equivalents at the beginning of the year	172,628	179,560
Cash and cash equivalents at the end of the year	336,467	172,628	179,560
Norvial S.A. [member]
Disclosure of summarized financial information [line items]
Assets	84,889	109,778
Liabilities	(53,715)	(66,506)
Current net assets (liabilities)	31,174	43,272
Assets	442,186	462,739
Liabilities	(282,358)	(306,261)
Non-current net assets (liabilities)	159,828	156,478
Net assets	191,002	199,750
Revenue	272,679	163,117
Profit (loss) before income tax	24,067	21,104
Income tax expense	(6,815)	(3,885)
Profit (loss) for the period	17,252	17,219
Total comprehensive income for the year	17,252	17,219
Dividends paid to non-controlling interest (Note 35-d)	8,580	8,184
Net cash provided from operating activities	12,514	70,939
Net cash (applied to) provided from investing activities	(33)	(2)
Net cash (applied to) provided from financing activities	(46,045)	(43,536)
(Decrease) increase in cash and cash equivalents, net	(33,564)	27,401
Cash and cash equivalents at the beginning of the year	99,850	72,449
Cash and cash equivalents at the end of the year	66,286	99,850	72,449
GyM Ferrovias S.A. [member]
Disclosure of summarized financial information [line items]
Assets	449,180	534,148
Liabilities	(93,879)	(563,081)
Current net assets (liabilities)	355,301	(28,933)
Assets	623,033	974,688
Liabilities	(668,080)	(716,946)
Non-current net assets (liabilities)	(45,047)	257,742
Net assets	310,254	228,809
Revenue	397,853	577,993
Profit (loss) before income tax	121,079	116,822
Income tax expense	(39,634)	(35,524)
Profit (loss) for the period	81,445	81,298
Total comprehensive income for the year	81,445	81,298
Net cash provided from operating activities	379,882	(161,318)
Net cash (applied to) provided from investing activities	2,845	1,928
Net cash (applied to) provided from financing activities	(273,009)	189,495
(Decrease) increase in cash and cash equivalents, net	109,718	30,105
Cash and cash equivalents at the beginning of the year	191,178	161,073
Cash and cash equivalents at the end of the year	S/ 300,896	S/ 191,178	S/ 161,073

XML

Intangible Assets - Summary of Major Assumptions Used by the Group in Determining the Fair Value Less Cost of Disposal (Detail)	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Engineering and Construction [member]
Disclosure Of Major Assumptions Used In Determining Fair Value Less Cost Of disposal And Value In Use [line items]
Gross margin	12.43%	12.67%	9.50%
Terminal growth rate	3.00%	3.00%	3.00%
Discount rate	11.83%	12.55%	11.18%
Engineering and Construction [member] | Morelco S.A.S. [member]
Disclosure Of Major Assumptions Used In Determining Fair Value Less Cost Of disposal And Value In Use [line items]
Average revenue growth rate	5.70%	12.25%	9.60%
Terminal growth rate	3.00%	3.00%	3.00%
Discount rate	11.83%	12.55%	11.18%
Engineering and Construction [member] | Vial y Vives - DSD [member]
Disclosure Of Major Assumptions Used In Determining Fair Value Less Cost Of disposal And Value In Use [line items]
Average revenue growth rate	19.58%	19.58%	25.00%
Terminal growth rate	2.00%	3.00%	4.00%
Discount rate	14.12%	14.00%	14.80%
Electromechanical [member]
Disclosure Of Major Assumptions Used In Determining Fair Value Less Cost Of disposal And Value In Use [line items]
Gross margin	8.86%	7.63%	8.00%
Terminal growth rate	2.00%	2.00%	2.00%
Discount rate	11.40%	11.44%	11.48%

XML

Consolidated Statement of Income - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Profit or loss [abstract]
Revenues from construction activities	S/ 2,411,880	S/ 1,961,100	S/ 2,214,108
Revenues from services provided	1,089,465	1,003,623	956,300
Revenue from real estate and sale of goods	583,659	934,739	843,605
Revenue	4,085,004	3,899,462	4,014,013
Cost of construction activities	(2,351,563)	(1,921,112)	(2,107,206)
Cost of services provided	(866,326)	(741,172)	(770,792)
Cost of real estate and sale of goods	(425,352)	(562,689)	(633,563)
Cost of sales	(3,643,241)	(3,224,973)	(3,511,561)
Gross profit	441,763	674,489	502,452
Administrative expenses	(213,908)	(278,433)	(322,454)
Other income and expenses	(326,754)	(61,335)	(32,869)
Gain (loss) from the sale of investments		(7)	34,545
Operating profit (loss)	(98,899)	334,714	181,674
Financial expenses	(231,709)	(247,982)	(150,777)
Financial income	74,656	50,925	13,742
Share of the profit or loss of associates and joint ventures accounted for using the equity method	(218,774)	(3,709)	473
Profit (loss) before income tax	(474,726)	133,948	45,112
Income tax expense	(319,957)	(113,318)	(46,305)
(Loss) profit from continuing operations	(794,683)	20,630	(1,193)
Profit (loss) from discontinued operations	(43,959)	36,785	210,431
Profit (loss) for the period	(838,642)	57,415	209,238
Profit (loss) attributable to:
Owners of the Company	(884,721)	(83,188)	148,738
Non-controlling interest	46,079	140,603	60,500
Profit (loss) for the year	S/ (838,642)	S/ 57,415	S/ 209,238
Earnings (loss) per share attributable to owners of the Company during the year	S/ (1.076)	S/ (0.125)	S/ 0.225
Loss per share from continuing operations attributable to owners of the Company during the year	S/ (1.023)	S/ (0.099)	S/ (0.101)

XML

Inventories - Schedule of Real Estate Work in Progress (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure of inventories [line items]
Work in progress - Real estate	S/ 158,010	S/ 135,376
Los Parques de Comas [member]
Disclosure of inventories [line items]
Work in progress - Real estate	77,757	69,743
Los Parques del Callao [member]
Disclosure of inventories [line items]
Work in progress - Real estate	35,549	46,697
Los Parques del Mar [member]
Disclosure of inventories [line items]
Work in progress - Real estate	32,183
Los Parques de Piura [member]
Disclosure of inventories [line items]
Work in progress - Real estate	5,658	11,066
Inmobiliaria Pezet 417 S.A.C. [member]
Disclosure of inventories [line items]
Work in progress - Real estate	4,091	3,563
Others [member]
Disclosure of inventories [line items]
Work in progress - Real estate	S/ 2,772	S/ 4,307

XML

Inventories - Schedule of Inventories (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Disclosure of inventories [abstract]
Land	S/ 183,218	S/ 230,689
Work in progress- Real estate	158,010	135,376
Finished properties	86,190	76,027
Construction materials	59,879	27,852
Merchandise and supplies	74,959	53,310
Inventories gross	562,256	523,254
Impairment of inventories	(9,683)	(9,207)
Inventories	S/ 552,573	S/ 514,047

XML

Other Accounts Receivable - Schedule of Advances to Suppliers (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Other Accounts Receivable [line items]
Total	S/ 135,481	S/ 146,536
Current advances to suppliers	135,481	81,719
Non-current advances to suppliers		64,817
Alsthom Transporte - Linea 1 [member]
Other Accounts Receivable [line items]
Total	2,597	66,395
Current advances to suppliers	2,597	1,578
Non-current advances to suppliers		64,817
Advances - joint operations vendors [member]
Other Accounts Receivable [line items]
Total	49,181	42,410
Current advances to suppliers	49,181	42,410
Others [member]
Other Accounts Receivable [line items]
Total	35,400	27,976
Current advances to suppliers	35,400	27,976
Advances – Refineria Talara [member]
Other Accounts Receivable [line items]
Total	48,303	9,755
Current advances to suppliers	S/ 48,303	S/ 9,755

XML

Other Accounts Payable

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Other Accounts Payable

21 OTHER ACCOUNTS PAYABLE

As of December 31, this item includes:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Advances received from customers (a)		496,547		307,839		301,868		270,714		194,679		37,125
Consorcio Ductos del Sur - payable (b)		234,978		148,076		—		—		234,978		148,076
Salaries and other payable		97,774		87,869		97,774		87,869		—		—
Put option liability on Morelco acquisition (Note 32-b)		103,649		106,444		—		71,341		103,649		35,103
Third-party loans		11,560		11,619		11,560		9,545		—		2,074
Other taxes payable		132,775		104,444		111,444		84,235		21,331		20,209
Acquisition of non-controlling interest (Note 35-a)		22,963		22,697		22,963		22,697		—		—
Guarantee deposits		15,137		13,201		15,137		13,201		—		—
Consorcio Rio Mantaro - payables		35,531		35,625		35,531		35,625		—		—
Other accounts payables		55,865		70,592		36,392		40,078		19,473		30,514
		1,206,779		908,406		632,669		635,305		574,110		273,101

(a) Advances received from customers relate mainly to construction projects, and are discounted from invoicing, in accordance with the terms of the contracts.

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Advances Customers Consortiums		154,660		115,250		146,764		113,093		7,896		2,157
Autoridad Autonoma del Sistema Electrico de Transporte		164,218		—		9,781		—		154,437		—
Customer advances for real estate projects		67,519		66,258		67,519		66,258		—		—
Concentradora Norte - Quellaveco		—		64,118		—		44,932		—		19,186
Special National Transportation Infrastructure Project		69,943		42,030		38,959		26,534		30,984		15,496
Talara Refinery		10,835		—		10,835		—		—		—
Others		29,372		20,183		28,010		19,897		1,362		286
		496,547		307,839		301,868		270,714		194,679		37,125

(b) The other accounts payable of Consorcio Constructor Ductos del Sur correspond to payment obligations to suppliers and the main subcontractors for S/235 million, assumed by the subsidiary GyM S.A; as a result of the termination of GSP operations.

The fair value of short-term accounts approximates their book value due to their short-term maturities. The non-current part mainly includes non-financial liabilities such as advances received from customers; the remaining balance is not significant in the financial statements for the periods shown.

XML

Cash and Cash Equivalent- Summary of Cash and Cash Equivalents - (Parenthetical) (Detail) - PEN (S/) S/ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Disclosure of cash and cash equivalents [line items]
Time deposit maturity period	90 days
GyM Ferrovias S.A. [member]
Disclosure of cash and cash equivalents [line items]
Reserve fund for bond payments	S/ 181	S/ 133
Norvial S.A. [member]
Disclosure of cash and cash equivalents [line items]
Reserve fund for bond payments	S/ 18	S/ 13
Bottom of range [member]
Disclosure of cash and cash equivalents [line items]
Time deposit interest rate	1.15%
Top of range [member]
Disclosure of cash and cash equivalents [line items]
Time deposit interest rate	2.85%

XML

Trade Accounts Receivables, Net - Summary of Trade Accounts Receivables (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable, Current	S/ 821,737	S/ 1,007,828
Trade accounts receivable, Non-current	753,202	1,020,067
Trade receivables [member]
Disclosure Of Accounts Receivable [line items]
Trade receivables	1,574,939	2,027,895
Trade accounts receivable, Current	821,737	1,007,828
Trade accounts receivable, Non-current	753,202	1,020,067
Receivables [Member] | Trade receivables [member]
Disclosure Of Accounts Receivable [line items]
Trade receivables	923,316	1,376,517
Trade accounts receivable, Current	380,135	827,611
Trade accounts receivable, Non-current	543,181	548,906
Unbilled Receivables Subsidiaries [Member]
Disclosure Of Accounts Receivable [line items]
Trade receivables	421,841	79,847
Unbilled Receivables Subsidiaries [Member] | Trade receivables [member]
Disclosure Of Accounts Receivable [line items]
Trade receivables	421,841	79,847
Trade accounts receivable, Current	336,272	79,847
Trade accounts receivable, Non-current	85,569
Unbilled Receivables Concessions [Member] | Trade receivables [member]
Disclosure Of Accounts Receivable [line items]
Trade receivables	234,688	584,174
Trade accounts receivable, Current	110,236	113,013
Trade accounts receivable, Non-current	124,452	471,161
Gross carrying amount [member]
Disclosure Of Accounts Receivable [line items]
Trade receivables	918,410	1,363,874
Gross carrying amount [member] | Trade receivables [member]
Disclosure Of Accounts Receivable [line items]
Trade receivables	1,579,845	2,040,538
Trade accounts receivable, Current	826,643	1,020,471
Trade accounts receivable, Non-current	753,202	1,020,067
Accumulated impairment [member] | Trade receivables [member]
Disclosure Of Accounts Receivable [line items]
Trade receivables	(4,906)	(12,643)
Trade accounts receivable, Current	S/ (4,906)	S/ (12,643)

XML

Intangible Assets

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Intangible Assets

17 INTANGIBLE ASSETS

The movement in intangible assets and the related accumulated amortization as of December 31, 2017, 2018 and 2019 is as follows:

	Goodwill			Trade- marks			Concession rights			Contractual relations with clients			Software and development costs			Costs of development of wells			Land use rights			Other assets			Total
At January 1, 2017
Cost		205,195			109,511			844,213			95,127			60,607			342,100			13,288			37,917			1,707,958
Accumulated amortization and impairment		(60,675	)		(15,845	)		(326,453	)		(62,316	)		(40,586	)		(233,378	)		—			(8,419	)		(747,672	)
Net cost		144,520			93,666			517,760			32,811			20,021			108,722			13,288			29,498			960,286
Net initial cost		144,520			93,666			517,760			32,811			20,021			108,722			13,288			29,498			960,286
Additions		—			—			38,156			5,274			3,330			49,698			—			20,832			117,290
Capitalization of interest		—			—			26,015			—			—			—			—			—			26,015
Deconsolidation, net		(3,524	)		—			(17,354	)		—			(21	)		—			—			(2,767	)		(23,666	)
Transfers from assets under construction		—			—			(11,217	)		—			2,761			5,008			—			3,617			169
Derecognition - net		—			—			(537	)		—			(1,572	)		—			—			(355	)		(2,464	)
Amortization		—			—			(24,609	)		(4,189	)		(8,091	)		(46,695	)		—			(2,973	)		(86,557	)
Impairment loss		(20,068	)		(29,541	)		—			—			—			—			—			—			(49,609	)
Translations adjustments		(4,124	)		975			13			369			1,196			—			—			177			(1,394	)
Net final cost		116,804			65,100			528,227			34,265			17,624			116,733			13,288			48,029			940,070
At December 31, 2017
Cost		197,547			110,486			841,229			98,607			59,913			396,806			13,288			59,324			1,777,200
Accumulated amortization and impairment		(80,743	)		(45,386	)		(313,002	)		(64,342	)		(42,289	)		(280,073	)		—			(11,295	)		(837,130	)
Net cost		116,804			65,100			528,227			34,265			17,624			116,733			13,288			48,029			940,070
At January 1, 2018
Cost		197,547			110,486			841,229			98,607			59,913			396,806			13,288			59,324			1,777,200
Accumulated amortization and impairment		(80,743	)		(45,386	)		(313,002	)		(64,342	)		(42,289	)		(280,073	)		—			(11,295	)		(837,130	)
Net cost		116,804			65,100			528,227			34,265			17,624			116,733			13,288			48,029			940,070
Net initial cost		116,804			65,100			528,227			34,265			17,624			116,733			13,288			48,029			940,070
Additions		—			—			23,803			—			3,267			68,544			—			5,067			100,681
Capitalization of interest		—			—			3,361			—			—			—			—			—			3,361
Desconsolidation, net		(20,086	)		(8,358	)		(22,758	)		(8,909	)		(10,153	)		—			—			(1,863	)		(72,127	)
Transfers from assets under construction		—			—			—			—			199			—			—			(199	)		—
Derecognition - cost		—			—			(16	)		—			(1,941	)		(4,126	)		—			—			(6,083	)
Amortization		—			—			(50,776	)		(7,996	)		(5,834	)		(41,930	)		—			(5,536	)		(112,072	)
Translations adjustments		(3,430	)		(4,301	)		199			(303	)		830			—			—			270			(6,735	)
Net final cost		93,288			52,441			482,040			17,057			3,992			139,221			13,288			45,768			847,095
At December 31, 2018
Cost		174,031			97,097			836,254			85,482			16,177			461,224			13,288			58,267			1,741,820
Accumulated amortization and impairment		(80,743	)		(44,656	)		(354,214	)		(68,425	)		(12,185	)		(322,003	)		—			(12,499	)		(894,725	)
Net cost		93,288			52,441			482,040			17,057			3,992			139,221			13,288			45,768			847,095
At January 1, 2019
Cost		174,031			97,097			836,254			85,482			16,177			461,224			13,288			58,267			1,741,820
Accumulated amortization and impairment		(80,743	)		(44,656	)		(354,214	)		(68,425	)		(12,185	)		(322,003	)		—			(12,499	)		(894,725	)
Net cost		93,288			52,441			482,040			17,057			3,992			139,221			13,288			45,768			847,095
Net initial cost		93,288			52,441			482,040			17,057			3,992			139,221			13,288			45,768			847,095
Additions		—			—			26,645			—			3,745			102,022			—			5,212			137,624
Capitalization of interest expenses		—			—			2,725			—			—			—			—			802			3,527
Transfers from assets under construction		—			—			—			—			672			—			—			(672	)		—
Derecognition - net		(930	)		—			—			—			(2,015	)		—			—			(4,106	)		(7,051	)
Amortization		—			—			(49,049	)		(3,682	)		(5,308	)		(43,552	)		—			(3,687	)		(105,278	)
Impairment loss		(33,089	)		—			(3,213	)		—			—			—			(2,468	)		—			(38,770	)
Impairment reversal		—			20,676			—			—			—			—			—			—			20,676
Translations adjustments		(1,902	)		(2,471	)		—			(114	)		(21	)		—			—			—			(4,508	)
Reclassifications		—			49			(15,198	)		(12,760	)		19,410			(3,717	)		—			12,216			—
Net final cost		57,367			70,695			443,950			501			20,475			193,974			10,820			55,533			853,315
At December 31, 2019
Cost		93,887			73,836			710,290			72,810			48,073			558,530			13,288			113,057			1,683,771
Accumulated amortization and impairment		(36,520	)		(3,141	)		(266,340	)		(72,309	)		(27,598	)		(364,556	)		(2,468	)		(57,524	)		(830,456	)
Net cost		57,367			70,695			443,950			501			20,475			193,974			10,820			55,533			853,315

a) Goodwill

Management reviews the results of its businesses on the basis of the type of economic activity carried on. At December 31, the goodwill of the cash-generating units (CGUs) is distributed as follows:

	2017		2018		2019
Engineering and construction		75,051		71,621		36,632
Electromechanical		20,737		20,737		20,735
Mining and construction services		13,366		—		—
IT equipment and services		930		930		—
Telecommunications services		6,720		—		—
		116,804		93,288		57,367

As a result of management’s annual impairment tests on goodwill, the recoverable amount of cash-generating units was determined on the basis of the greater their value in use and fair value less disposal costs. The value in use was determined on the basis of expected future cash flows generated by the evaluation of CGUs.

As a result of these evaluations in 2019, an impairment was identified in Morelco S.A.S. for S/33 million and Adexus S.A. for S/0.9 million. Through the subsidiary GyM S.A., the loss due to deterioration in Morelco was generated by the decrease in expected flows as a result of the reduction in the contracting of new projects during the year. Additionally, the Company impaired the value of goodwill in Adexus, because the subsidiary submitted a request for bankruptcy reorganization before the courts of justice of Chile, under the law 20720 of that country (Note 36 B).

In 2018, no provision for impairment was recorded. Additionally, it was not necessary to evaluate the impairment of goodwill in Stracon GyM S.A. because in March 2018 the Company sold its interest (87.59%) for a total of US$76.8 million (equivalent to S/248.8 million), generating a profit of S/41.9 million. In 2017, an impairment was identified in two CGU’s, Vial y Vives-DSD, and Morelco SAS and was accounted for as of December 31st, 2017. The impairment loss was generated due to the decrease in the expected cash flows, as a result of the reduction of the contracts linked to the backlog. The impairment impacted the goodwill for S/20.1 million in 2017.

The main assumptions used by the Group to determine fair value less disposal costs and value in use are as follows:

	Engineering and construction			Electro- mechanical
	%			%
2017
Gross margin		9.50	%		8.00	%
Terminal growth rate		3.00	%		2.00	%
Discount rate		11.18	%		11.48	%
2018
Gross margin		12.67	%		7.63	%
Terminal growth rate		3.00	%		2.00	%
Discount rate		12.55	%		11.44	%
2019
Gross margin		12.43	%		8.86	%
Terminal growth rate		3.00	%		2.00	%
Discount rate		11.83	%		11.40	%

These assumptions have been used for the analysis of each CGUs for a period of 5 years.

Management determines budgeted gross margins based on past results and market development expectations. Average growth rates are consistent with those prevailing in the industry. The discount rates used are pre-tax or post-tax, as applicable, and reflect the specific risks associated with the CGUs evaluated.

b) Trademarks

This item mainly includes the brands acquired in the business combination processes with Vial y Vives S.A.C. (S/75.4 million) in August 2013, Morelco S.A.S. (S/33.33 million) in December 2014 and Adexus S.A. (S/9.1 million) in August 2016. Management determined that the trademark from Vial y Vives, Morelco and Adexus have indefinite useful lives; consequently, annual impairment tests are performed on these intangible assets as explained in paragraph a) above.

As a result of these evaluations, as of December 31, 2019, the Vial y Vives - DSD the trademark impairment was reversed for S/20.7 million (equivalent to CLP4,782 million). Management considered that the market value of the trademark has increased due to the increase of projects in execution and projects and award process. In 2018, no provision for impairment was recorded. As of December 31, 2017, the Vial y Vives - DSD trademark partially deteriorated, the amount of the impairment was S/29.5 million.

Additionally, in 2019, the Company impaired the value of the Adexus trademark, because the subsidiary submitted a request for bankruptcy reorganization before the courts of justice of Chile, under the law 20,720 of that country (Note 36 B).

The main assumptions used by the Group to determine fair value less cost of sales are as follows:

	Engineering and construction
	Morelco			Vial y Vives- DSD
	%			%
2017
Average revenue growth rate		9.60	%		25.00	%
Terminal growth rate		3.00	%		4.00	%
Discount rate		11.18	%		14.80	%
2018
Average revenue growth rate		12.25	%		19.58	%
Terminal growth rate		3.00	%		3.00	%
Discount rate		12.55	%		14.00	%
2019
Average revenue growth rate		5.70	%		19.58	%
Terminal growth rate		3.00	%		2.00	%
Discount rate		11.83	%		14.12	%

c) Concessions

As of December 31, mainly include intangibles of Norvial S.A.:

	2018		2019
EPC Contract		70,133		62,319
Construction of the second tranch of the “Ancon- Huacho-Pativilca” highway		12,463		4,809
Cost of capitalized indebtedness at effective interest rates between 7.14% and 8.72%		9,836		950
Road improvement		15,558		14,449
Implementation for road safety		6,283		8,152
Work capitalization of second roadway		310,417		314,614
Disbursements for land adquisition		4,757		4,233
Other intangible assets contracted for the delivery process		6,775		7,477
Total Norvial S.A.		436,222		417,003
Other concessions		45,818		26,947
		482,040		443,950

d) Cost of well’s development

Through one of its subsidiaries, GMP S.A., the Group operates and extracts oil from two fields (Lot I and Lot V) located in the province of Talara, in northern Peru. Both fields are operated under long-term service contracts in which the Group provides hydrocarbon extraction services to Perupetro. The expiration date of these contracts are December 2021 and October 2023 for Lot 1 and Lot V, respectively.

On December 10, 2014, the Peruvian State granted the subsidiary GMP S.A. the right to exploit for 30 years the oil lots III and IV (owned by the Peruvian State - Perupetro) located in the Talara basin, Piura. The investment committed is estimated at US$400 million and corresponds to the drilling of 230 wells in Lot III and 330 wells in Lot IV. The drilling began in April 2015 in both lots.

As part of the Group’s obligations under the infrastructure, it is necessary to incur certain costs to prepare the wells located in Lots I, III, IV and V. These costs are capitalized as part of the intangible assets with a value of S/108 million during 2019 (S/68 million in 2018 and S/99 million in 2017), which includes the capitalization of the provision for dismantling wells and facilities in Lots I, III, IV and V, for S/36 million (S/3 million during 2018).

The lots are amortized on the basis of the useful lives of the wells (determined as five years for lots I and V and units produced for lots III and IV), which is less than the total service contract period with Perupetro.

e) Amortization of intangible assets

Amortization of intangibles is broken down in the consolidated income statement as follows:

	2017		2018		2019
Cost of sales and services (Note 26)		67,381		98,318		99,589
Administrative expenses (Note 26)		3,002		4,856		5,689
(+) Amortization discontinued operations		16,174		8,898		—
		86,557		112,072		105,278

XML

Cash and Cash Equivalents

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Cash and Cash Equivalents

9 CASH AND CASH EQUIVALENTS

At December 31 this account comprises:

	2018		2019
Cash on hand		1,377		1,323
Remittances in-transit		3,566		5,664
Bank accounts		313,253		223,378
Escrow account (a)		334,579		552,439
Time deposits (b)		148,365		166,174
		801,140		948,978

(a) The Group maintains trust accounts in local and foreign banks that includes reserve funds for bond payments issued by the subsidiaries GyM Ferrovias S.A. and Norvial S.A. for the year 2019 S/181 million and S/18 million, respectively (for the year 2018 S/133 million and S/13 million, respectively), as shown in the following detail:

	2018		2019
Reserve funds issued bonds		146,590		199,192
Real estate projects		38,961		31,794
Engineering and construction projects Colombia		39,084		44,457
Engineering and construction projects Peru		47,538		192,069
Infrastructure projects		62,406		84,927
		334,579		552,439

(b) Time deposits have maturities less than 90 days and may be renewed upon maturity. These deposits earn interest that fluctuates between 1.15% and 2.85%.

	Financial entities		Interest rate			2018		2019
GyM Ferrovias S.A.		Banco de Credito del Peru		2.70	%		32,000		32,300
GyM Ferrovias S.A.		Banco Continental		1.15	%		—		69,531
GyM S.A.		Banco de Credito del Peru		2.40	%		1,906		28,213
Survial S.A.		Banco de Credito del Peru		2.85	%		—		15,400
GMI S.A.		Banco de Credito del Peru		2.52	%		—		9,993
Graña y Montero S.A.A.		Banco de Credito del Peru		2.40	%		110,281		5,312
Norvial S.A.		Banco de Credito del Peru		2.85	%		—		4,763
Concesion Canchaque S.A.C.		Banco de Credito del Peru		2.85	%		—		662
Concesionaria la Chira S.A.		Banco de Credito del Peru		2.50	%		4,170		—
GMP S.A.		Banco de Credito del Peru		2.50	%		7		—
Viva GyM S.A.		Banco de Credito del Peru		2.50	%		1		—
							148,365		166,174

The above figures are reconciled with the amount of cash shown in the consolidated statement of cash flows at the end of the year as follows:

	2017			2018			2019
Cash and cash equivalent on consolidated statement of financial position		626,180			801,140			948,978
Bank overdrafts (Note 18)		(120	)		(119	)		—
Balances per consolidated statement of cash flows		626,060			801,021			948,978

XML

Trade Accounts Receivables, Net - Summary of Unbilled Receivables by Subsidiaries Grouped by Main Projects (Detail) - Unbilled Receivables Subsidiaries [Member] - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable	S/ 421,841	S/ 79,847
Infrastructure [member]
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable	12,395	38,769
Infrastructure [member] | Operation and maintenance of roads [Member]
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable	9,837	38,066
Infrastructure [member] | Oil Services [member]
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable	1,657
Infrastructure [member] | Others [member]
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable	901	703
Engineering and Construction [member]
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable	409,446	41,078
Engineering and Construction [member] | Others [member]
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable	106,513	29,098
Engineering and Construction [member] | Talara Refinery [member]
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable	190,831
Engineering and Construction [member] | North Concentrator Plant - Quellaveco [member]
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable	52,488
Engineering and Construction [member] | Oxide Plant - Marcobre [Member]
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable	26,658
Engineering and Construction [member] | Civil works, assembly and electromechanics - Acero Arequipa [Member]
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable	16,449
Engineering and Construction [member] | Project Mina Gold Fields La Cima S.A. [member]
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable	3,409	S/ 11,980
Engineering and Construction [member] | Generating Plant Machu Picchu [member]
Disclosure Of Accounts Receivable [line items]
Trade accounts receivable	S/ 13,098

XML

Transactions with Related Parties and Joint Operators - Disclosure of Transactions Between Related Parties (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of transactions between related parties [line items]
Revenue from sales of goods and services	S/ 44,238	S/ 58,264	S/ 21,505
Purchase of goods and services	1,765	2,731	16,967
Associates [member]
Disclosure of transactions between related parties [line items]
Revenue from sales of goods and services	108	1,704	3,367
Purchase of goods and services		2,130	2,776
Joint operations [member]
Disclosure of transactions between related parties [line items]
Revenue from sales of goods and services	44,130	56,560	18,138
Purchase of goods and services	S/ 1,765	S/ 601	S/ 14,191

XML

Critical Accounting Estimates and Judgements

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Critical Accounting Estimates and Judgements

5 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Estimates and judgments used are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. These estimates are based on information available through the date of the issuance of the financial statements. Therefore, actual results could differ from those estimates.

5.1 Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates are based on information available through the date of issuance of the financial statements, therefore, actual results could differ from those estimates. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

a) Estimated impairment of goodwill and other intangible assets with an indefinite useful life

Impairment reviews are undertaken annually to determine if goodwill arising from business acquisitions and other intangible assets with indefinite useful life are impaired, in accordance with the policy described in Note 2.15-i). For this purpose, goodwill is allocated to the different Cash Generating Unit (“CGU”) to which it relates while other intangible assets with indefinite useful life are assessed individually. The recoverable amounts of the CGU and of other intangible assets with indefinite useful life have been determined based on the higher of their value-in-use and fair value less costs to sell. This evaluation requires the exercise of Management’s professional judgment to analyze any potential indicators of impairment as well as the use of estimates in determining the value in use, including preparing future cash flows, macro-economic forecasts as well as defining the interest rate at which said cash flows will be discounted.

If the Group experiences a significant drop in revenues or a drastic increase in costs or changes in other factors, the fair value of their business units might decrease. If management determines that the factors reducing the fair value of the business are permanent, those economic factors will be taken into consideration to determine the recoverable amount of those business units and therefore, goodwill, as well as other intangible assets with indefinite useful life may be deemed to be impaired, which may cause their write-down.

In accordance with the impairment evaluations carried out by Management, losses due to impairment of goodwill and trademarks have been recognized by the decrease in the expected flows because of a reduction of the contracts’ “backlog”.

At December 31, 2018, and 2019 the Group has performed a sensitivity analysis increasing or decreasing the assumptions of gross margin, discount rate, and revenue and terminal growth rate by a 10%, with all the other variables held constant, as follows:

	Difference between recoverable amount and carrying amounts
	2018					2019
Goodwill
Gross margin		(10	%)	+10	%		(10	%)	+10	%
Engineering and construction		0.51	%	41.12	%		(25.54	%)	(4.25	%)
Electromechanical		(9.73	%)	38.89	%		35.63	%	52.97	%
Discount rate:		(10	%)	+10	%		(10	%)	+10	%
Engineering and construction		39.19	%	6.65	%		(4.30	%)	(23.09	%)
Electromechanical		29.36	%	2.97	%		48.89	%	39.92	%
Terminal growth rate:		(10	%)	+10	%		(10	%)	+10	%
Engineering and construction		18.48	%	23.30	%		(16.31	%)	(13.38	%)
Electromechanical		12.90	%	16.34	%		42.36	%	46.32	%
Trademarks
Revenue growth rate:		(10	%)	+10	%		(10	%)	+10	%
Morelco		75.00	%	116.27	%		22.14	%	60.11	%
Vial y Vives - DSD		27.40	%	55.71	%		110.69	%	72.38	%
Discount rate:		(10	%)	+10	%		(10	%)	+10	%
Morelco		126.00	%	72.33	%		63.02	%	23.56	%
Vial y Vives - DSD		29.54	%	55.99	%		78.72	%	106.64	%
Terminal growth rate:		(10	%)	+10	%		(10	%)	+10	%
Morelco		91.70	%	99.82	%		37.49	%	44.02	%
Vial y Vives - DSD		38.99	%	44.26	%		88.07	%	95.20	%

In 2019, if the gross margin, discount rate or terminal growth rate had been 10% below or 10% above Management’s estimates, the Group would not have recognized a provision for impairment of goodwill in the Electromechanical CGU (GMA); however, at the same variation, the Group would have to recognized a provision for impairment of the Engineering and Construction (Morelco). In 2018, if the discount rate or terminal growth rate had been 10% below or 10% above Management’s estimates, the Group would not have recognized a provision for impairment of goodwill; however, at the same variation in gross margin, the Group would have to recognized a provision for impairment of the Electromechanical GMA.

As a result of these assessments, as of December 31, 2019, an impairment of the goodwill in Morelco was identified and recorded in the Engineering and Construction CGU. In 2018, it was not necessary to record an impairment provision. (Note 17).

In 2018 and 2019, if the revenue growth rate, terminal growth rate or the discount rate had been 10% below or had been 10% above Management’s estimates, the Group would have not recognized a provision for impairment in trademarks.

At December 31, 2019, as a result of these evaluations, a reversal of goodwill impairment was identified and recorded in the Engineering and Construction CGU, trademark impairment in Vial y Vives-DSD. In 2018, it was not necessary to record an impairment provision (Note 17).

b) Income taxes

Determination of the tax obligations and expenses requires interpretations of the applicable tax laws and regulations. The Group seeks legal and tax counsel before making any decision on tax matters.

Deferred income tax assets and liabilities are calculated on the temporary differences arising between the tax basis of assets and liabilities and the amounts stated in the financial statement of each entity that makes up the Group, using the tax rates in effect in each of the years in which the difference is expected to reverse. Any change in tax rates will affect the deferred income tax assets and liabilities. This change will be recognized in the consolidated statement of income in the period in which the change takes effect.

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which deductible temporary differences and tax loss carryforwards can be utilized. For this purpose, the Group takes into consideration all available evidence, including factors such as historical data, projected income, current operations, and tax planning strategies. A tax benefit related to a tax position is only recognized if it is more likely than not that the benefit will ultimately be realized.

As of December 31, 2019, the Group’s possible maximum exposure to tax contingencies amount to S/71.4 million (S/15.7 million in 2018).

The income tax for the year includes Management’s evaluation of the amount of taxes to be paid in uncertain tax positions, where the liabilities have not yet been agreed with the tax administration.

c) Percentage of completion revenue recognition

Revenues from engineering and construction contracts are recognized by the percentage of completion method, which requires estimating the margin that will be obtained prior to the culmination of works. Projections of these margins are determined by management based on their estimated budgets execution and adjusted periodically to reflect actual performance as work is completed. In this regard, management believes that the estimates made at the end of the year are reasonable. When changes occur that were not approved in a project’s original scope of work, income is recognized as equivalent to the cost incurred (i.e. no profit is recognized) until such changes have been approved.

Contract revenue and cost related to contracts are recognized in the company’s consolidated statement of comprehensive income in the accounting periods in which the work was executed. Costs related to the construction contract costs are recognized as works in the consolidated comprehensive income in the accounting periods in which the work was executed. However, any expected and likely cost overruns related to the contract over total expected income under the contract is recognized as an expense immediately. In addition, any change in the estimates under the contract is recognized as a change in accounting estimates in the period in which the change is made and future periods if applicable. In certain construction contracts, the terms of these agreements allow to retain an amount to customers until it culminates with construction. Under these contracts, the total amount cannot be recognized until the construction is finished.

As of December 31, 2017, 2018 and 2019, a sensitivity analysis was performed considering a 10% increase/decrease in the Group’s gross margins, as follows:

	2017			2018			2019
Revenues		2,214,108			1,961,100			2,411,880
Gross profit		106,902			32,685			60,317
%		4.83			1.67			2.50
Plus 10%		5.31			1.84			2.75
Increase in profit before income tax		10,667			3,399			6,010
		117,569			36,084			66,327
Less 10%		4.35			1.50			2.25
Decrease in profit before income tax		(10,667	)		(3,399	)		(6,010	)
		96,235			29,286			54,307

d) Provision for well closure costs

At December 31, 2019, the present value of the estimated provision for the closure of 189 wells located in Talara amounted to S/50.1 million (S/20.3 million as of December 31, 2018, for the closure of 158 wells). The well closure liability is adjusted to reflect the changes that resulted from the passage of time and from reviews of either the date of occurrence or the amount of the present value of the originally estimated obligations (Note 17-d).

The Group estimates the present value of its future obligation for well closure costs, or well closure liability, and increases the carrying amount of the asset that will be withdrawn in the future and that is shown under the heading of intangibles in the consolidated statement of financial position.

The pre-tax discount rate used for the present value calculation was 1.58% for Block I and 1.66% for Block V (2.46% for block I and 2.51% for block V for the year 2018), and 2.33% for Blocks III and IV, (2.98% for the year 2018) based on 3, 5 and 30-year rate used on U.S. bonds effective at December 31, 2018 and 2019.

If on December 31, 2018, and 2019, the estimated rate had increased or decreased by 10%, with all variables held constant, the impact on pre-tax profit would not have been significant.

e) Impairment of investment in associate and account receivable to Gasoducto Sur Peruano S.A. (GSP)

Based on the termination of the concession agreement, on which Gasoducto Sur Peruano S.A. (GSP) acts as concessionaire (Note 15 a-i), as well as the agreements taken at the end of the year, the Group identified potential impairment indicators affecting the recoverability of its investment. Consequently, the Group impaired the full investment amount.

In that process, the Group has applied judgment to weight the various uncertainties surrounding the amount that can be recovered from this investment. Management has determined the recoverable amount assuming the following key factors: (i) the amount that GSP will recover as a result of a possible public auction, (ii) the liquidation of the company via the GSP Creditor´s meeting, and (iii) the validity of its right to subordinate the Odebrecht Group’s debts in GSP.

The calculation of the impairment estimate assumes a process of liquidation of GSP in accordance with Peruvian legislation, whereby the value of the asset to be recovered is first applied to the payments of liabilities in the different categories of creditors and the remainder, if it is the case, to the payment of the shareholders, taking into account the existing subordination agreements.

As of December 31, 2018 in relation to the amount to be recovered by GSP, the Group is assuming a recovery of the minimum amount established in the concession agreement, which is equivalent to 72.25% of the Net Carrying Amount (NCA) of the Concession assets. This amount, in substance, represents a minimum payment to be obtained by GSP based on a public auction (liquidation) to be set up for the adequate transfer of the Concession’s assets to a new Concessionaire, under the relevant contractual terms and conditions. Additionally, given the situation of non-compliance by the Peruvian State and the situation in which the process of forming the creditors’ meeting was, and according to the opinion of lawyers for similar cases, the term for five years was estimated the recovery of the account receivable.

As of December 31, 2019, as a result of events that occurred during 2019, certain assumptions were changed with respect to the company’s estimated recovery of the net carrying amount (valor contable neto) of GSP. In December 2019, as mentioned in note 1, the Group signed a preliminary settlement and cooperation agreement with Peruvian authorities, and in addition, the creditors’ meeting of GSP remains delayed. Consequently, any legal actions that GSP could initiate in order to collect have also been postponed, and therefore the time expected for the collection of the receivables has increased. As a result, we have estimated a period of 8 years to collect the receivables, and that GSP was likely to recover 50% of the net carrying amount.

5.2 Critical judgments in applying the accounting policies

Consolidation of entities in which the Group holds less than 50%

The Group owns some direct and indirect subsidiaries of which the Group has control even though it has less than 50% of the voting rights. These subsidiaries mainly comprise indirect subsidiaries in the real estate business owned through Viva GyM S.A., having the power to affect the relevant activities that impact the subsidiaries’ returns, even though the Group holds interest between 30% and 50%. Additionally, the Group has control de facto by a contractual agreement with the majority investor over Promotora Larcomar S.A. of which it owns 46.55% of the equity interest.

Consolidation of entities in which the Group does not have joint control but holds rights and obligations over the assets and liabilities

The Group assesses, on an ongoing basis, the nature of the contracts signed with one or more parties. If no control or joint control is determined to be held by the Group, but it has rights over assets and obligations for liabilities under the arrangement, then the Group recognizes its assets, liabilities, revenue and expenses and its share of any jointly controlled assets or liabilities and any revenue or expense arising under the arrangement as a joint operation in accordance with IFRS 11 - Joint arrangements (Note 2.2-d).

XML

Other Accounts Receivable

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Other Accounts Receivable

13 OTHER ACCOUNTS RECEIVABLE

At December 31, this account comprises:

	Total						Current						Non-current
	2018			2019			2018			2019			2018		2019
Advances to suppliers (a)		146,536			135,481			81,719			135,481			64,817		—
Income tax on-account payments (b)		91,353			70,647			91,353			70,647			—		—
VAT credit (c)		105,238			45,910			79,076			31,646			26,162		14,264
Guarantee deposits (d)		180,010			181,400			167,769			98,046			12,241		83,354
Claims to third parties (e)		62,163			79,772			62,163			38,875			—		40,897
Petroleos del Peru S.A.- Petroperu S.A. (f)		75,750			80,941			11,953			17,292			63,797		63,649
ITAN and other tax receivable		45,890			60,883			20,246			30,233			25,644		30,650
Restricted funds (g)		67,972			15,974			39,394			973			28,578		15,001
Rental and sale of equipment - GyM S.A. projects		34,768			30,798			34,768			30,798			—		—
Accounts receivable from personneel		3,479			2,836			3,479			2,836			—		—
Consorcio Constructor Ductos del Sur (h)		52,114			27,782			—			—			52,114		27,782
Consorcio Panorama		27,132			23,491			5,306			—			21,826		23,491
Other minors		23,837			16,488			16,059			15,253			7,778		1,235
		916,242			772,403			613,285			472,080			302,957		300,323
Impairment		(24,834	)		(27,580	)		(24,834	)		(27,580	)		—		—
		891,408			744,823			588,451			444,500			302,957		300,323

The fair value of the other short-term accounts receivable is similar to their book value due to their short-term maturity. The non-current portion corresponds mainly to non-financial assets such as advances to suppliers and tax credits. Other non-current accounts receivable have maturities that vary between 2 and 5 years.

The maximum exposure to credit risk at the reporting date is the carrying amount of each class of other accounts receivable mentioned. The Group does not request guarantees.

Below is a description and composition of the main accounts receivable:

(a) Advance to suppliers - corresponds mainly to the following:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Alsthom Transporte - Linea 1		66,395		2,597		1,578		2,597		64,817		—
Advances - Refineria Talara		9,755		48,303		9,755		48,303		—		—
Advances - joint operations vendors		42,410		49,181		42,410		49,181		—		—
Others		27,976		35,400		27,976		35,400		—		—
		146,536		135,481		81,719		135,481		64,817		—

(b) Income tax on-account payments, consist of income tax payments and credits in the following subsidiaries:

	Current
	2018		2019
GyM S.A.		55,377		45,628
GMI S.A.		3,877		7,203
GMP S.A.		8,511		2,400
Concar S.A.		8,563		3,709
Viva GyM S.A.		8,114		3,485
Graña y Montero S.A.A.		6,463		2,895
Norvial S.A.		—		4,266
Survial S.A.		334		426
Others		114		635
		91,353		70,647

(c) Tax credit related to VAT on the following subsidiaries:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
GyM S.A.		39,183		12,963		38,653		12,963		530		—
GyM Ferrovias S.A.		25,453		11,970		25,453		11,970		—		—
Graña y Montero S.A.A.		9,821		—		9,821		—		—		—
Concar S.A.		2,382		1,653		2,382		1,653		—		—
Survial SA.		—		1,817		—		1,817		—		—
GMI S.A.		589		1,513		589		1,513		—		—
Viva GyM S.A.		7,255		6,874		511		513		6,744		6,361
Negocios del Gas S.A.		8,411		—		—		—		8,411		—
GMP S.A.		456		396		456		396		—		—
Norvial S.A.		1,997		—		—		—		1,997		—
Concesionaria Vesur S.A.		6,074		—		1,015		—		5,059		—
Others		3,617		8,724		196		821		3,421		7,903
		105,238		45,910		79,076		31,646		26,162		14,264

Management considers that VAT credit will be recovered in the regular course of future operations of subsidiaries.

(d) Guarantee deposits

Corresponds to funds held by customers for construction contracts mainly from the subsidiary GyM S.A. These deposits are retained by customers to ensure the subsidiary’s compliance with its obligations under the contracts. The amounts retained will be recovered once the work is completed.

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Talara Refinery		72,992		55,567		72,992		308		—		55,259
Retention Toquepala		15,633		19,630		15,633		19,630		—		—
Retention Minera Teck		2,848		16,075		2,848		16,075		—		—
Retention Quellaveco		2,996		15,926		2,996		15,926		—		—
Joint operations retention		43,268		29,575		43,268		15,654		—		13,921
Retention Morelco		16,282		15,261		16,282		15,261		—		—
Retention Marcobre		—		5,052		—		5,052		—		—
SBLC guarantees - Sale of CAM Chile S.p.A.		20,221		14,726		7,980		3,576		12,241		11,150
Others		5,770		9,588		5,770		6,564		—		3,024
		180,010		181,400		167,769		98,046		12,241		83,354

(e) Third-party claims

As of December 31, 2018, it mainly includes the claim of S/27.2 million (net of provision for doubtful accounts of S/19.4 million) for termination of the Purchase and Sale Contract for Real Estate Development Megaproject of Social Housing Construction “Ciudad Alameda de Ancon” signed between the subsidiary Viva GyM S.A., together with the Ministry of Housing, Construction and Sanitation and “Mi Vivienda” fund. Such contract was terminated, and in accordance with the civil code 1372, it is appropriate for the parties to fully reimburse the executed benefits to date, which results in the reimbursement of the S/22 million from the Ministry of Housing and S/5.2 million from the “Mi Vivienda” fund.

As of December 31, 2019, the net amount equals S/20 million, which corresponds to the present value in a term of 11 years and at a rate of 8%. The amount of the lawsuit filed by the subsidiary Viva GyM S.A. against the Ministry of Housing, Construction and Sanitation equals S/116.3 million; which includes compensation for damages (emergent damage and loss of earnings). According to the opinions of Management and legal advisors, it is expected that the amount of the claim will be collected within a maximum period of 11 years.

(f) Other accounts receivable from Petroperu S.A.

It corresponds to accounts receivable to Petroperu S.A., for the additional investments of the Terminales del Perú S.A. Consortium of the subsidiary GMP S.A.

(g) Restricted funds

As of December 31, 2019, includes restricted funds of S/7.7 million of the Company related to the sale of GMD S.A. and S/0.9 million of the subsidiary Viva GyM S.A. for bank certificates under guarantee and S/7.3 corresponds to the bank accounts for the reserve account of the Concesionaria La Chira S.A. (S/28 million, S/11 million and S/7.3 million as of December 31, 2018, respectively).

(h) Consorcio Constructor Ductos del Sur

In 2019, it corresponds to a penalty for termination of the contract for S/27.8 million. The decrease compared to the previous year is mainly due to the compensation of debts assumed by the subsidiary GyM S.A. related to CCDS suppliers for S/21.5 million (S/30.6 million in 2018).

XML

Other Accounts Receivable - Additional Information (Detail) - PEN (S/) S/ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Other Accounts Receivable [line items]
Claims to third parties		S/ 27.2
Rights for collection of penalty for termination of contract	S/ 27.8
Provision for Doubtful Accounts		19.4
Claim Present Value	S/ 20.0
Claim Term	11 years
Claims Discount Rate	8.00%
Ministry of housing [member]
Other Accounts Receivable [line items]
Reimbursement of executed benefits		22.0
Viva GyM S.A. [member]
Other Accounts Receivable [line items]
Litigation Claim Receivable	S/ 116.3
Fondo Mi Vivienda [member]
Other Accounts Receivable [line items]
Reimbursement of executed benefits		5.2
GDM SA [Member]
Other Accounts Receivable [line items]
Guarantee accounts for credit agreement	7.7	28.0
Viva GyM SA [Member]
Other Accounts Receivable [line items]
Guarantee accounts for credit agreement	0.9	11.0
Concesionaria La Chira S.A. [member]
Other Accounts Receivable [line items]
Guarantee Accounts For Reserve Account	7.3	7.3
Subsidiary GyM S.A. [Member]
Other Accounts Receivable [line items]
Rights for collection of penalty for termination of contract	S/ 21.5	S/ 30.6
Bottom of range [member]
Other Accounts Receivable [line items]
Other Non-current accounts receivable maturities	2 years
Top of range [member]
Other Accounts Receivable [line items]
Other Non-current accounts receivable maturities	5 years

XML

Costs And Expenses by Nature

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Expenses by Nature

26 COSTS AND EXPENSES BY NATURE

For the years ended December 31, the detail of this item is as follows:

	Cost of goods and services		Administrative expenses		Total
2017
Services provided by third-parties		1,268,665		104,950		1,373,615
Salaries, wages and fringe benefits (i)		919,409		134,695		1,054,104
Purchase of goods		856,745		140		856,885
Other management charges		235,102		48,057		283,159
Depreciation		103,566		5,776		109,342
Amortization		67,381		3,002		70,383
Impairment of inventories		40,592		—		40,592
Impairment of property, plant and equipment		11,928		20		11,948
Taxes		7,470		7,408		14,878
Impairment of accounts receivable (ii)		703		18,406		19,109
		3,511,561		322,454		3,834,015

	Cost of goods and services			Administrative expenses		Total
2018
Services provided by third-parties		1,064,687			98,060		1,162,747
Salaries, wages and fringe benefits (i)		817,392			105,505		922,897
Purchase of goods		755,209			—		755,209
Other management charges		375,308			43,533		418,841
Amortization		98,318			4,856		103,174
Depreciation		81,199			5,135		86,334
Impairment of accounts receivable (ii)		45,658			19,418		65,076
Taxes		8,727			1,926		10,653
Impairment of property, plant and equipment		5,468			—		5,468
Inventory recovery		(26,993	)		—		(26,993	)
		3,224,973			278,433		3,503,406

	Cost of goods and services			Administrative expenses		Total
2019
Services provided by third-parties		1,450,577			58,728		1,509,305
Salaries, wages and fringe benefits (i)		951,455			117,426		1,068,881
Purchase of goods		855,743			—		855,743
Other management charges		174,678			27,708		202,386
Amortization		99,589			5,689		105,278
Depreciation		95,445			1,907		97,352
Impairment of accounts receivable (ii)		4,900			—		4,900
Taxes		6,941			2,450		9,391
Impairment of property, plant and equipment		3,907			—		3,907
Impairment of investments		255			—		255
Inventory recovery		(249	)		—		(249	)
		3,643,241			213,908		3,857,149

(i) For the years ended on December 31, salaries, wages and fringe benefits comprise the following:

	2017		2018		2019
Salaries		747,195		629,641		786,346
Statutory gratification		106,797		80,697		88,369
Social contributions		76,330		73,297		61,533
Employee’s severance indemnities		43,399		50,852		49,944
Vacations		33,603		39,221		39,298
Workers’ profit sharing (Note 25)		9,777		7,862		6,340
Others		37,003		41,327		37,051
		1,054,104		922,897		1,068,881

(ii) For the years ended December 31, the impairment of accounts receivable includes the following:

	2017		2018		2019
Trade accounts receivables		724		3,065		955
Other accounts receivable		—		44,252		2,421
Accounts receivable from related parties		18,385		17,759		1,524
		19,109		65,076		4,900

XML

Segment Reporting - Disclosure of Detailed Information About Operating Segments Financial Position (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Assets.-
Cash and cash equivalent	S/ 948,978	S/ 801,140	S/ 626,180
Trade accounts receivables, net	821,737	1,007,828
Work in progress, net	49,457	28,538
Accounts receivable from related parties	36,658	34,903
Other accounts receivable	444,500	588,451
Inventories, net	552,573	514,047
Prepaid expenses	11,348	10,549
Current assets before non-current assets classified as held for sale	2,865,251	2,985,456
Non-current assets classified as held for sale	205,418	247,798
Total current assets	3,070,669	3,233,254
Long-term trade accounts receivable, net	753,202	1,020,067
Long-term work in progress, net	23,117	32,212
Long-term accounts receivable from related parties	546,941	778,226
Prepaid expenses	27,934	33,697
Other long-term accounts receivable	300,323	302,957
Investments in associates and joint ventures	37,035	257,765
Investment property	28,326	29,133
Property, plant and equipment, net	443,870	470,554	865,735	S/ 1,113,599
Intangible assets, net	853,315	847,095	940,070	S/ 960,286
Right-of-use assets, net	78,813
Deferred income tax asset	240,919	425,436
Total non-current assets	3,333,795	4,197,142	S/ 4,775,724
Total assets	6,404,464	7,430,396
LIABILITIES AND EQUITY
Borrowings	454,260	826,474
Bonds	44,737	39,167
Trade accounts payable	1,136,121	1,079,531
Accounts payable to related parties	38,916	55,941
Current income tax	47,999	25,807
Other accounts payable	635,305	632,669
Provisions	113,483	6,197
Non-current liabilities classified as held for sale	210,025	225,828
Total current liabilities	2,680,846	2,891,614
Borrowings	344,806	376,198
Long-term bonds	879,305	897,875
Other long-term accounts payable	273,101	574,110
Long-term accounts payable to related parties	22,583	21,849
Provisions	214,952	103,411
Derivative financial instruments	52	61
Deferred income tax liability	112,734	75,347
Total non-current liabilities	1,847,533	2,048,851
Total liabilities	4,528,379	4,940,465
Equity attributable to controlling interest in the Company	1,477,810	2,088,360
Non-controlling interest	398,275	401,571
Total liabilities and equity	6,404,464	7,430,396
Parent company operations [member]
Assets.-
Cash and cash equivalent	31,847	129,269
Trade accounts receivables, net	985	1,068
Work in progress, net		3,576
Accounts receivable from related parties	99,794	98,308
Other accounts receivable	27,274	49,160
Prepaid expenses	122	1,221
Current assets before non-current assets classified as held for sale	160,022	282,602
Non-current assets classified as held for sale	203,020	247,798
Total current assets	363,042	530,400
Long-term accounts receivable from related parties	552,687	744,655
Other long-term accounts receivable	59,844	52,645
Investments in associates and joint ventures	1,495,422	2,213,023
Property, plant and equipment, net	49,779	69,088
Intangible assets, net	19,490	23,514
Right-of-use assets, net	55,532
Deferred income tax asset	20,752	218,201
Total non-current assets	2,253,506	3,321,126
Total assets	2,616,548	3,851,526
LIABILITIES AND EQUITY
Borrowings	121,379	209,492
Trade accounts payable	33,488	55,968
Accounts payable to related parties	58,951	91,754
Current income tax	286	1,381
Other accounts payable	34,433	38,209
Provisions	82,580
Non-current liabilities classified as held for sale	210,025	225,828
Total current liabilities	541,142	622,632
Borrowings	190,671	268,478
Other long-term accounts payable	3,102	2,605
Long-term accounts payable to related parties	165,286	183,826
Provisions	68,474	51,055
Deferred income tax liability	243	1,054
Total non-current liabilities	427,776	507,018
Total liabilities	968,918	1,129,650
Equity attributable to controlling interest in the Company	1,644,707	2,708,803
Non-controlling interest	2,923	13,073
Total liabilities and equity	2,616,548	3,851,526
Elimination of intersegment amounts [member]
Assets.-
Accounts receivable from related parties	(312,535)	(379,747)
Other accounts receivable	2	2
Inventories, net	(11,601)	(15,444)
Current assets before non-current assets classified as held for sale	(324,134)	(395,189)
Total current assets	(324,134)	(395,189)
Long-term accounts receivable from related parties	(308,023)	(260,430)
Prepaid expenses	(510)	(509)
Other long-term accounts receivable		(2)
Investments in associates and joint ventures	(1,582,294)	(2,082,768)
Property, plant and equipment, net	(1,159)	(1,159)
Intangible assets, net	7,134	11,872
Right-of-use assets, net	(15,315)
Deferred income tax asset	5,176	5,963
Total non-current assets	(1,894,991)	(2,327,033)
Total assets	(2,219,125)	(2,722,222)
LIABILITIES AND EQUITY
Borrowings	(9,039)
Accounts payable to related parties	(309,190)	(363,595)
Total current liabilities	(318,229)	(363,595)
Borrowings	(7,783)
Long-term accounts payable to related parties	(310,161)	(276,676)
Total non-current liabilities	(317,944)	(276,676)
Total liabilities	(636,173)	(640,271)
Equity attributable to controlling interest in the Company	(1,473,185)	(1,973,387)
Non-controlling interest	(109,767)	(108,564)
Total liabilities and equity	(2,219,125)	(2,722,222)
Operating segments [member] | Engineering and Construction [member]
Assets.-
Cash and cash equivalent	372,991	177,455
Trade accounts receivables, net	531,591	583,842
Work in progress, net	49,457	24,962
Accounts receivable from related parties	202,181	203,583
Other accounts receivable	327,977	386,467
Inventories, net	57,093	27,852
Prepaid expenses	6,812	3,825
Current assets before non-current assets classified as held for sale	1,548,102	1,407,986
Non-current assets classified as held for sale	2,398
Total current assets	1,550,500	1,407,986
Long-term trade accounts receivable, net	97,256	14,455
Long-term accounts receivable from related parties	290,966	254,660
Other long-term accounts receivable	113,879	77,028
Investments in associates and joint ventures	109,839	114,676
Investment property	1,450
Property, plant and equipment, net	186,589	205,678
Intangible assets, net	136,547	160,088
Right-of-use assets, net	5,638
Deferred income tax asset	176,740	166,624
Total non-current assets	1,118,904	993,209
Total assets	2,669,404	2,401,195
LIABILITIES AND EQUITY
Borrowings	180,535	232,409
Trade accounts payable	932,142	777,130
Accounts payable to related parties	206,907	179,351
Current income tax	18,451	5,898
Other accounts payable	441,271	389,896
Provisions	6,031	521
Total current liabilities	1,785,337	1,585,205
Borrowings	32,620	9,314
Other long-term accounts payable	222,887	357,146
Long-term accounts payable to related parties	120,255	8,880
Provisions	80,125	32,122
Deferred income tax liability	31,037	5,564
Total non-current liabilities	486,924	413,026
Total liabilities	2,272,261	1,998,231
Equity attributable to controlling interest in the Company	330,992	331,178
Non-controlling interest	66,151	71,786
Total liabilities and equity	2,669,404	2,401,195
Operating segments [member] | Energy infrastructure [member]
Assets.-
Cash and cash equivalent	53,118	34,816
Trade accounts receivables, net	63,402	54,350
Accounts receivable from related parties	369	492
Other accounts receivable	30,853	37,611
Inventories, net	32,366	18,823
Prepaid expenses	1,271	1,345
Current assets before non-current assets classified as held for sale	181,379	147,437
Total current assets	181,379	147,437
Prepaid expenses	887
Other long-term accounts receivable	63,649	63,797
Investments in associates and joint ventures	8,006	7,230
Property, plant and equipment, net	184,819	171,430
Intangible assets, net	244,901	183,614
Right-of-use assets, net	24,038
Deferred income tax asset	4,741	5,025
Total non-current assets	531,041	431,096
Total assets	712,420	578,533
LIABILITIES AND EQUITY
Borrowings	42,760	26,621
Trade accounts payable	67,444	49,254
Accounts payable to related parties	2,233	1,933
Current income tax	961	2,797
Other accounts payable	16,721	13,147
Provisions	18,459	5,412
Total current liabilities	148,578	99,164
Borrowings	116,218	87,166
Provisions	40,268	20,234
Derivative financial instruments	52	61
Deferred income tax liability	36,476	24,541
Total non-current liabilities	193,014	132,002
Total liabilities	341,592	231,166
Equity attributable to controlling interest in the Company	346,415	323,943
Non-controlling interest	24,413	23,424
Total liabilities and equity	712,420	578,533
Operating segments [member] | Toll roads infrastructure [member]
Assets.-
Cash and cash equivalent	123,020	168,460
Trade accounts receivables, net	44,513	78,013
Accounts receivable from related parties	43,852	40,820
Other accounts receivable	30,228	28,492
Inventories, net	7,109	9,206
Prepaid expenses	2,779	3,068
Current assets before non-current assets classified as held for sale	251,501	328,059
Total current assets	251,501	328,059
Long-term trade accounts receivable, net	36,273	33,380
Long-term work in progress, net	23,117	32,212
Long-term accounts receivable from related parties	836	39,341
Prepaid expenses	24,462	28,214
Other long-term accounts receivable	5,156	7,058
Property, plant and equipment, net	11,106	14,585
Intangible assets, net	443,420	466,153
Right-of-use assets, net	3,860
Deferred income tax asset	13,054	11,876
Total non-current assets	561,284	632,819
Total assets	812,785	960,878
LIABILITIES AND EQUITY
Borrowings	2,383	15,384
Bonds	28,995	25,745
Trade accounts payable	34,762	61,233
Accounts payable to related parties	35,554	46,099
Current income tax	3,710	1,398
Other accounts payable	53,987	72,823
Provisions	6,183
Total current liabilities	165,574	222,682
Borrowings	2,070	556
Long-term bonds	276,550	299,637
Other long-term accounts payable	15,989	31,477
Long-term accounts payable to related parties	836	1,167
Provisions	24,691
Deferred income tax liability	5,806	7,010
Total non-current liabilities	325,942	339,847
Total liabilities	491,516	562,529
Equity attributable to controlling interest in the Company	258,223	332,406
Non-controlling interest	63,046	65,943
Total liabilities and equity	812,785	960,878
Operating segments [member] | Transportation infrastructure [member]
Assets.-
Cash and cash equivalent	300,896	191,178
Trade accounts receivables, net	97,059	226,919
Accounts receivable from related parties	1,853	758
Other accounts receivable	18,548	31,012
Inventories, net	30,594	25,282
Prepaid expenses	231	874
Current assets before non-current assets classified as held for sale	449,181	476,023
Total current assets	449,181	476,023
Long-term trade accounts receivable, net	619,086	966,202
Prepaid expenses	2,307	5,152
Other long-term accounts receivable		64,817
Property, plant and equipment, net	841	1,586
Intangible assets, net	794	749
Right-of-use assets, net	5
Total non-current assets	623,033	1,038,506
Total assets	1,072,214	1,514,529
LIABILITIES AND EQUITY
Borrowings	5	209,463
Bonds	15,742	13,422
Trade accounts payable	28,508	104,652
Accounts payable to related parties	21,024	65,256
Current income tax	23,887	9,888
Other accounts payable	4,713	11,677
Total current liabilities	93,879	414,358
Long-term bonds	602,755	598,238
Other long-term accounts payable	2,176	154,756
Long-term accounts payable to related parties	22,583	81,207
Provisions	1,394
Deferred income tax liability	39,172	37,178
Total non-current liabilities	668,080	871,379
Total liabilities	761,959	1,285,737
Equity attributable to controlling interest in the Company	232,692	171,594
Non-controlling interest	77,563	57,198
Total liabilities and equity	1,072,214	1,514,529
Operating segments [member] | Water treatment infrastructure [member]
Assets.-
Cash and cash equivalent	6,388	6,700
Trade accounts receivables, net	1,168	598
Accounts receivable from related parties	0	9,930
Other accounts receivable	109	199
Prepaid expenses	133	135
Current assets before non-current assets classified as held for sale	7,798	17,562
Total current assets	7,798	17,562
Long-term accounts receivable from related parties	10,475
Prepaid expenses	788	840
Other long-term accounts receivable	7,346	7,346
Property, plant and equipment, net	153	109
Right-of-use assets, net	7
Deferred income tax asset	720	620
Total non-current assets	19,489	8,915
Total assets	27,287	26,477
LIABILITIES AND EQUITY
Borrowings	6
Trade accounts payable	132	121
Accounts payable to related parties		58
Current income tax		226
Other accounts payable	835	631
Total current liabilities	973	1,036
Other long-term accounts payable	2,106	1,656
Long-term accounts payable to related parties	23,784	23,445
Total non-current liabilities	25,890	25,101
Total liabilities	26,863	26,137
Equity attributable to controlling interest in the Company	424	340
Total liabilities and equity	27,287	26,477
Operating segments [member] | Real estate [member]
Assets.-
Cash and cash equivalent	60,718	93,262
Trade accounts receivables, net	83,019	63,038
Accounts receivable from related parties	1,144	60,759
Other accounts receivable	9,509	55,508
Inventories, net	437,012	448,328
Prepaid expenses		81
Current assets before non-current assets classified as held for sale	591,402	720,976
Total current assets	591,402	720,976
Long-term trade accounts receivable, net	587	6,030
Other long-term accounts receivable	50,449	30,268
Investments in associates and joint ventures	6,062	5,604
Investment property	26,876	29,133
Property, plant and equipment, net	11,742	9,237
Intangible assets, net	1,029	1,105
Right-of-use assets, net	5,048
Deferred income tax asset	19,736	17,127
Total non-current assets	121,529	98,504
Total assets	712,931	819,480
LIABILITIES AND EQUITY
Borrowings	116,231	133,105
Trade accounts payable	39,645	31,173
Accounts payable to related parties	23,437	35,085
Current income tax	704	4,219
Other accounts payable	83,345	106,286
Provisions	230	264
Total current liabilities	263,592	310,132
Borrowings	11,010	10,684
Other long-term accounts payable	26,841	26,470
Total non-current liabilities	37,851	37,154
Total liabilities	301,443	347,286
Equity attributable to controlling interest in the Company	137,542	193,483
Non-controlling interest	273,946	278,711
Total liabilities and equity	S/ 712,931	S/ 819,480

XML

Segment Reporting- Additional Information (Detail)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of operating segments [line items]
Number of External customer that represents 10% or more of the Group's revenue	10.00%
Number of major customers [member]
Disclosure of operating segments [line items]
Number of External customer that represents 10% or more of the Group's revenue	0.00%
Foreign countries [member]
Disclosure of operating segments [line items]
Percentage of revenues derived from foreign operations	14.00%	20.30%	10.60%

XML

Other Comprehensive Income

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Other Comprehensive Income

30 OTHER COMPREHENSIVE INCOME

The analysis of this account is reflected below:

	Cash flow hedge			Foreign currency translations adjustment			Increase in fair value of available-for sale assets		Exchange difference from net investment in a foreign operation			Total
At January 1, 2017		(87	)		(54,556	)		7,461		(8,455	)		(55,637	)
Credit (charge) for the year		650			(9,166	)		—		9,222			706
Tax effects		(192	)		—			—		(2,729	)		(2,921	)
Other comprehensive income of the year		458			(9,166	)		—		6,493			(2,215	)
At December 31, 2017		371			(63,722	)		7,461		(1,962	)		(57,852	)
(Charge) credit for the year		160			(7,875	)		—		(10,800	)		(18,515	)
Tax effects		(47	)		—			—		2,808			2,761
Transfer to profit or loss (*)		—			14,805			—		—			14,805
Other comprehensive income of the year		113			6,930			—		(7,992	)		(949	)
At December 31, 2018		484			(56,792	)		7,461		(9,954	)		(58,801	)
(Charge) credit for the year		8			(6,892	)		—		—			(6,884	)
Tax effects		(2	)		—			—		—			(2	)
Other comprehensive income of the year		6			(6,892	)		—		—			(6,886	)
At December 31, 2019		490			(63,684	)		7,461		(9,954	)		(65,687	)

(*) The amount of S/14.8 million corresponds to the recognition of the translation adjustment from CAM Chile S.A., an indirect subsidiary sold in December 2018.

The amounts in the above table only represent amounts attributable to the Company’s controlling interest, net of tax. The table below shows the movement in other comprehensive income per year:

	2017			2018			2019
Controlling interest		(2,215	)		(949	)		(6,886	)
Non-controlling interest		(3,117	)		(1,346	)		(1,734	)
Adjustment for actuarial gains and losses, net of tax		(2,948	)		16,589			—
Total value in OCI		(8,280	)		14,294			(8,620	)

XML

Tax Situation - Summary of Weighted Average Pre-tax Profit or Loss and Applicable Income Tax Rate (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of weighted average pre-tax profit or loss and applicable income tax rate [line items]
Pre - tax profit	S/ (474,726)	S/ 133,948	S/ 45,112
Tax at statutory tax rate	S/ (141,370)	S/ 40,507	S/ 13,811
Peru [member]
Disclosure of weighted average pre-tax profit or loss and applicable income tax rate [line items]
Statutory tax rate	29.50%	29.50%	28.00%
Pre - tax profit	S/ (1,612,192)	S/ 151,627	S/ 420,421
Tax at statutory tax rate	S/ (475,597)	S/ 44,730	S/ 124,024
Peru Norvial [member]
Disclosure of weighted average pre-tax profit or loss and applicable income tax rate [line items]
Statutory tax rate	27.00%	27.00%	27.00%
Pre - tax profit	S/ 24,066	S/ 21,104	S/ 68,104
Tax at statutory tax rate	S/ 6,498	S/ 5,698	S/ 18,388
Peru Gy M Ferrovias [member]
Disclosure of weighted average pre-tax profit or loss and applicable income tax rate [line items]
Statutory tax rate	30.00%	30.00%	30.00%
Pre - tax profit	S/ 121,080	S/ 125,136	S/ 29,028
Tax at statutory tax rate	S/ 36,324	S/ 37,541	S/ 8,708
Peru Vesur [member]
Disclosure of weighted average pre-tax profit or loss and applicable income tax rate [line items]
Statutory tax rate	30.00%	30.00%	30.00%
Pre - tax profit	S/ (17,752)	S/ 2,951	S/ 779
Tax at statutory tax rate	S/ (5,326)	S/ 885	S/ 234
Peru GMP [member]
Disclosure of weighted average pre-tax profit or loss and applicable income tax rate [line items]
Statutory tax rate	29.00%	29.00%	30.00%
Pre - tax profit	S/ 35,421	S/ 35,421	S/ 20,941
Tax at statutory tax rate	S/ 10,272	S/ 10,272	S/ 6,073
Chile (member)
Disclosure of weighted average pre-tax profit or loss and applicable income tax rate [line items]
Statutory tax rate	27.00%	27.00%	24.00%
Pre - tax profit	S/ (36,917)	S/ (20,768)	S/ (93,031)
Tax at statutory tax rate	S/ (9,967)	S/ (5,607)	S/ (23,723)
Colombia (member)
Disclosure of weighted average pre-tax profit or loss and applicable income tax rate [line items]
Statutory tax rate	33.00%	37.00%	40.00%
Pre - tax profit			S/ (27,970)
Tax at statutory tax rate			S/ (11,188)
Bolivia (member)
Disclosure of weighted average pre-tax profit or loss and applicable income tax rate [line items]
Statutory tax rate	25.00%	25.00%	25.00%
Pre - tax profit	S/ 681	S/ (137)	S/ (2,897)
Tax at statutory tax rate	S/ 170	S/ (34)	(724)
Colombia - Morelco S.A [member]
Disclosure of weighted average pre-tax profit or loss and applicable income tax rate [line items]
Statutory tax rate		37.00%
Pre - tax profit		S/ 11,851
Tax at statutory tax rate		S/ 4,385
Colombia - GyM S.A. Branch [member]
Disclosure of weighted average pre-tax profit or loss and applicable income tax rate [line items]
Statutory tax rate	33.00%	33.00%
Pre - tax profit	S/ (11,824)	S/ 1,984
Tax at statutory tax rate	(3,902)	655
Unrealized Gain (Loss) [member]
Disclosure of weighted average pre-tax profit or loss and applicable income tax rate [line items]
Pre - tax profit	1,022,711	(195,221)	(370,263)
Tax at statutory tax rate	300,158	(58,018)	(107,981)
Utility [member]
Disclosure of weighted average pre-tax profit or loss and applicable income tax rate [line items]
Pre - tax profit	(474,726)	133,948	45,112
Tax at statutory tax rate	S/ (141,370)	S/ 40,507	S/ 13,811

XML

Contingencies Commitments and Warranties - Additional Information (Detail) S/ in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2019 PEN (S/)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Disclosure of commitments and contingencies [line items]
Letters of guarantee amount | $		$ 376.1	$ 471.6
Guaranteeing operations amount | $		$ 13.9	$ 13.9
Civil lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	S/ 17,100
Administrative lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	2,500
Labor lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	16,760
Income tax assessments [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	16,100
Contingency provision	48,500
Income tax assessments [member] | Top of range [member]
Disclosure of commitments and contingencies [line items]
Contingency provision	71,400
VAT tax assessments [member]
Disclosure of commitments and contingencies [line items]
Contingency provision	600
Income Tax And IGV Or VAT Tax [member]
Disclosure of commitments and contingencies [line items]
Contingency provision	3,300
GyM S.A. [member] | Civil lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	300
GyM S.A. [member] | Administrative lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	250
GyM S.A. [member] | Labor lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	8,900
GyM S.A. [member] | Income tax assessments [member]
Disclosure of commitments and contingencies [line items]
Contingency provision	37,500
GMP S.A. [member] | Administrative lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	200
GMP S.A. [member] | Labor lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	2,040
GMP S.A. [member] | Contentious administrative lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	600
Las Lomas - Inmobiliaria [member] | Civil lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	100
Consorcio Constructor Ductos del Sur [member] | Civil lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	15,400
Viva GyM S.A. [member] | Administrative lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	1,080
Viva GyM S.A. [member] | Income tax assessments [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	1,400
Contingency provision	3,700
Viva GyM S.A. [member] | Non domicilied income tax [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	100
Consorcio Peruano de Conservcaion [Member] | Civil lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	600
Consorcia Rio Urubamba [Member] | Civil lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	500
consorcia Vial Ayarucho [Member] | Civil lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	100
Consorcio Torormocho [Member] | Administrative lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	200
GMVBS SA [Member] | Administrative lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	340
Inmobiliaria Almonte SAC [Member] | Administrative lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	340
Terminales del Peru [member] | Administrative lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	50
Concar S.A. [member] | Labor lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	2,030
GMI S.A. [member] | Income tax assessments [member]
Disclosure of commitments and contingencies [line items]
Contingency provision	6,100
Consorcio Rio Mantaro [member] | Labor lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	300
Consorcio Rio Mantaro [member] | Income tax assessments [member]
Disclosure of commitments and contingencies [line items]
Contingency provision	1,200
Consortium Constructor Ductos del Sur [member] | VAT tax assessments [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	2,700
The company [member] | Income tax assessments [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	14,700
Consorcio GyM—Conciviles [member] | Labor lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	1,520
Consorcio Lima Commercial Activities [member] | Labor lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	1,000
Morelco SA [member] | Labor lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	350
Consorcio tren electric [member] | Labor lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	150
GyM International Operations SAC [Member] | Labor lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	140
Vial y Vives [member] | Labor lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	30
Servisel SA [Member] | Labor lawsuits [member]
Disclosure of commitments and contingencies [line items]
Contingent liabilities	S/ 300

XML

Borrowings - Additional information (Detail) S/ in Thousands, $ in Millions	1 Months Ended	12 Months Ended
	Jul. 31, 2019	Dec. 31, 2019 PEN (S/)	Dec. 31, 2018 PEN (S/)	Dec. 31, 2016 PEN (S/)	Dec. 31, 2016 USD ($)	Dec. 31, 2019 USD ($)	Oct. 31, 2019 PEN (S/)	Oct. 31, 2019 USD ($)	Sep. 30, 2019 PEN (S/)	Aug. 31, 2019 PEN (S/)	Aug. 31, 2019 USD ($)	Jul. 01, 2019 USD ($)	Dec. 31, 2018 USD ($)	Jul. 31, 2018 PEN (S/)	Jul. 31, 2018 USD ($)	Jun. 11, 2018 PEN (S/)	Jun. 11, 2018 USD ($)	Apr. 30, 2018 PEN (S/)	Apr. 30, 2018 USD ($)	Jul. 31, 2017 PEN (S/)	Jul. 31, 2017 USD ($)	Jun. 27, 2017 PEN (S/)	Jun. 27, 2017 USD ($)	Dec. 31, 2015 PEN (S/)	Dec. 31, 2015 USD ($)
Disclosure of detailed information about borrowings [line items]
Initial term of loan	18 months
Borrowings | S/		S/ 799,066	S/ 1,202,672
Repayment of line of credit facility																		S/ 245,800	$ 72.7
Repayment of line of credit facility, addition														S/ 52,100	$ 15.4
Outstanding line of credit		S/ 146,600				$ 44.2
Tranche A [member]
Disclosure of detailed information about borrowings [line items]
Outstanding line of credit							S/ 500	$ 0.1	S/ 400
Tranche B [member]
Disclosure of detailed information about borrowings [line items]
Outstanding line of credit										S/ 9,700	$ 9.2
Norvial S.A. [member]
Disclosure of detailed information about borrowings [line items]
Borrowings																S/ 138,000	$ 42.3
Percentage of economic rights		48.80%
Term Loan One [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, maturity		June 2020
Term Loan One [member] | Credit Suisse Syndicated Loan [member]
Disclosure of detailed information about borrowings [line items]
Term loan credit agreement																								S/ 672,000	$ 200.0
Initial term of loan			18 months
Current portion of outstanding balance			S/ 126,700										$ 37.5
Term Loan One [member] | Credit Suisse Syndicated Loan [member] | three months LIBOR [Member]
Disclosure of detailed information about borrowings [line items]
Borrowings, adjustment to interest rate basis		4.90%				4.90%
Term Loan One [member] | GSP Bridge Loan [member]
Disclosure of detailed information about borrowings [line items]
Borrowings		S/ 214,500				$ 63.5
Term Loan One [member] | Natixis, BBVA, SMBC and MUFJ [member]
Disclosure of detailed information about borrowings [line items]
Borrowings																						S/ 256,300	$ 78.7
Medium term loan credit agreement [member] | CS Peru Infrastructure Holdings LLC Loan [member]
Disclosure of detailed information about borrowings [line items]
Term loan credit agreement												$ 35.0
Gasoducto Sur Peruano S.A. [member] | GSP Bridge Loan [member]
Disclosure of detailed information about borrowings [line items]
Guarantee obligation				S/ 433,000	$ 129.0
GyM S.A. [member]
Disclosure of detailed information about borrowings [line items]
Revolving line of credit for working capital																				S/ 33,600	$ 1.6
Increase decrease in revolving line of credit																					14.0
Revolving line of credit for working capital																				S/ 143,900	51.6
GyM S.A. [member] | Tranche A [member]
Disclosure of detailed information about borrowings [line items]
Percentage of the amount of Tranche A		50.00%				50.00%
Percentage of the client invoices		50.00%				50.00%
GyM S.A. [member] | CS Peru Infrastructure Holdings LLC Loan [member]
Disclosure of detailed information about borrowings [line items]
Borrowings		S/ 112,900				$ 35.0
Grana Y Montero S.A.A. [member]
Disclosure of detailed information about borrowings [line items]
Issuance of performance bonds																					100.0
Issuance of performance bonds, addition																					$ 50.0
Inversiones concesion vial S.A.C [member] | Other financial entities [member]
Disclosure of detailed information about borrowings [line items]
Repayment of borrowings | S/		S/ 142,200	S/ 145,600
Not more than six months after the closing date [member] | CS Peru Infrastructure Holdings LLC Loan [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate												9.10%
Not more than one year after the closing date [member] | CS Peru Infrastructure Holdings LLC Loan [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate												9.35%
Not more than thirty months after the closing date [member] | CS Peru Infrastructure Holdings LLC Loan [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate												9.60%
More than thirty months [member] | CS Peru Infrastructure Holdings LLC Loan [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate												10.10%
Bottom of range [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate		7.00%	7.00%			7.00%							7.00%
Bottom of range [member] | Level 2 of fair value hierarchy [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate		2.90%	2.40%			2.90%							2.40%
Bottom of range [member] | GyM S.A. [member] | Tranche A [member]
Disclosure of detailed information about borrowings [line items]
Percentage of the project valuations		65.00%				65.00%
Bottom of range [member] | Fixed interest rate [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate		1.00%	1.60%			1.00%							1.60%
Top of range [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate		12.00%	12.00%			12.00%							12.00%
Top of range [member] | Level 2 of fair value hierarchy [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate		11.00%	8.90%			11.00%							8.90%
Top of range [member] | GyM S.A. [member] | Tranche A [member]
Disclosure of detailed information about borrowings [line items]
Percentage of the project valuations		134.00%				134.00%
Top of range [member] | Fixed interest rate [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, interest rate		12.00%	15.80%			12.00%							15.80%

XML

Inventories (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Schedule of Inventories

At December 31, this account comprises:

	2018			2019
Land		230,689			183,218
Work in progress - Real estate		135,376			158,010
Finished properties		76,027			86,190
Construction materials		27,852			59,879
Merchandise and supplies		53,310			74,959
		523,254			562,256
Impairment of inventories		(9,207	)		(9,683	)
		514,047			552,573

Schedule of Inventories of Land

As of December 31, 2019, the land impairment provision equals S/5.2 million (S/9.2 million in 2018):

	2018		2019
Lurin (a)		72,080		71,902
San Isidro (b)		49,664		51,285
San Miguel (c)		28,811		—
Nuevo Chimbote (d)		17,262		17,457
Barranco (e)		13,585		14,202
Huancayo (f)		8,282		—
Piura		8,105		11,805
Carabayllo III		14,941		16,567
Others (g)		8,752		—
		221,482		183,218

(a) Plot of land of 107 hectares that corresponds to Inmobiliaria Almonte S.A.C. and a land 210 hectares that corresponds to Inmobiliaria Almonte 2 S.A.C.; both lands located in the district of Lurin, province of Lima, destined for the purposes of industrial development and public housing.

(b) Land located on David Samanez Ocampo street N° 140 in San Isidro district where a 15-story building with 24 apartments and 124 parking lots will be built.

(c) Regarding the Parques del Mar project located in San Miguel, a traditional multi-family housing condominium with 248 apartments and 185 parking lots is developed. In December 2019, the construction of the condominium began, which is why it is shown in products in process.

(d) Land located in Chimbote of 11.5 hectares for the development of a real estate social housing project.

(e) Land located in Paul Harris St. N°332 and N°336 in Barranco district, for the development of a residential building project.

(f) With respect to the project located in the province of Huancayo, in December 2019, the deliveries of land from the second stage began; That is why the stock of them is shown in finished products.

(g) With respect to others, it includes the Strip project that delivered commercial premises and was transferred from land to finished products for S/22.9 million, as of December 2019 there is a stock in finished products of S/6.3 million.

Schedule of Inventories of Work In Progress

At December 31, real state work in progress comprises the following projects:

	2018		2019
Los Parques de Comas		69,743		77,757
Los Parques del Callao		46,697		35,549
Los Parques del Mar		—		32,183
Los Parques de Piura		11,066		5,658
Inmobiliaria Pezet 417 S.A.C.		3,563		4,091
Others		4,307		2,772
		135,376		158,010

Schedule of Inventories of Finished Properties

At December 31, the balance of finished properties consists of the following investment properties:

	2018		2019
Los Parques de Comas		18,785		37,605
Huancayo		15,546		19,672
Los Parques de Callao		389		10,914
Klimt		5,911		5,978
El Rancho		19,314		2,347
Los Parques de San Martĺn de Porres		4,029		903
Rivera Navarrete		4,053		131
Los Parques de Carabayllo		942		168
Los Parques de Villa El Salvador II		4,277		117
Others		2,781		3,900
		76,027		81,735

XML

Costs And Expenses by Nature - Summary of Information about Expense by Nature (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Expense by Nature [line items]
Services provided by third-parties	S/ 1,509,305	S/ 1,162,747	S/ 1,373,615
Salaries, wages and fringe benefits	1,068,881	922,897	1,054,104
Purchase of goods	855,743	755,209	856,885
Other management charges	202,386	418,841	283,159
Amortization	105,278	103,174	70,383
Depreciation	97,352	86,334	109,342
Impairment of accounts receivable	4,900	65,076	19,109
Taxes	9,391	10,653	14,878
Impairment of property, plant and equipment	3,907	5,468	11,948
Impairment of inventories			40,592
Impairment of investments	255
Inventory recovery	(249)	(26,993)
Total report reclassified	3,857,149	3,503,406	3,834,015
Cost of goods and services [member]
Expense by Nature [line items]
Services provided by third-parties	1,450,577	1,064,687	1,268,665
Salaries, wages and fringe benefits	951,455	817,392	919,409
Purchase of goods	855,743	755,209	856,745
Other management charges	174,678	375,308	235,102
Amortization	99,589	98,318	67,381
Depreciation	95,445	81,199	103,566
Impairment of accounts receivable	4,900	45,658	703
Taxes	6,941	8,727	7,470
Impairment of property, plant and equipment	3,907	5,468	11,928
Impairment of inventories			40,592
Impairment of investments	255
Inventory recovery	(249)	(26,993)
Total report reclassified	3,643,241	3,224,973	3,511,561
Administrative expenses [member]
Expense by Nature [line items]
Services provided by third-parties	58,728	98,060	104,950
Salaries, wages and fringe benefits	117,426	105,505	134,695
Purchase of goods			140
Other management charges	27,708	43,533	48,057
Amortization	5,689	4,856	3,002
Depreciation	1,907	5,135	5,776
Impairment of accounts receivable	0	19,418	18,406
Taxes	2,450	1,926	7,408
Impairment of property, plant and equipment			20
Total report reclassified	S/ 213,908	S/ 278,433	S/ 322,454

XML

Trade Accounts Receivables, Net (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Trade Accounts Receivables

At December 31, this account comprises:

	Total						Current						Non-current
	2018			2019			2018			2019			2018		2019
Receivables (a)		1,376,517			923,316			827,611			380,135			548,906		543,181
Unbilled receivables - Subsidiaries (b)		79,847			421,841			79,847			336,272			—		85,569
Unbilled receivables - Concessions (c)		584,174			234,688			113,013			110,236			471,161		124,452
		2,040,538			1,579,845			1,020,471			826,643			1,020,067		753,202
Impairment of account receivables		(12,643	)		(4,906	)		(12,643	)		(4,906	)		—		—
		2,027,895			1,574,939			1,007,828			821,737			1,020,067		753,202

Schedule of Current and Non-Current Unbilled Receivables

b) The unbilled receivables by subsidiaries are documents related to the estimates of the degree of progress for services rendered that were not billed, according detail:

	2018		2019
GYM S.A.		14,455		384,660
Concar S.A.		38,770		10,737
GMI S.A.		26,622		24,787
GMP S.A.		—		1,657
		79,847		421,841

Below are the unbilled receivables by the subsidiaries grouped by the main projects:

	2018		2019
Infrastructure
Operation and maintenance of roads		38,066		9,837
Oil services		—		1,657
Others		703		901
		38,769		12,395
Engineering and Construction
Talara Refinery		—		190,831
North Concentrator Plant - Quellaveco		—		52,488
Oxide Plant - Marcobre		—		26,658
Civil works, assembly and electromechanics - Acero Arequipa		—		16,449
Project Mina Gold Fields La Cima S.A.		11,980		3,409
Generating Plant Machu Picchu		—		13,098
Others		29,098		106,513
		41,078		409,446
		79,847		421,841

c) The unbilled receivables – Concessions, corresponds to future collections for public services granted according to detail below:

	2018		2019
Linea 1 - Metro de Lima		558,179		208,205
Operation and maintenance of roads		25,397		25,315
Others		598		1,168
		584,174		234,688

Summary of Aging of Trade Accounts Receivable

The ageing of the receivables net of impairment are detailed as follows:

	2018		2019
Current		890,100		802,341
Past due up to 30 days		259,062		28,216
Past due from 31 days up to 180 days		28,575		21,490
Past due from 181 days up to 360 days		152,732		28,327
Past due over 360 days		33,405		38,036
		1,363,874		918,410

XML

Other Income and Expenses, Net - Summary of Other Income and Expenses, Net (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Other income:
Profit from Mizuho Agreement	S/ 89,688
Recovery of provisions and accounting impairments	23,279
Trademarks revaluation	20,676
Supplier debt forgiveness	19,026
Sale of fixed assets	12,748	S/ 26,007	S/ 93,013
Sale of investments		13,475
Present value of the liability from put option		6,122	79
Others	14,368	12,815	6,466
Other income	179,785	58,419	99,558
Other expenses:
Asset impairment	296,581
Civil repair to the Peruvian Government	69,150	73,500
Legal litigation	49,754
Impairment of goodwill and trademarks	33,089		49,608
Net cost of fixed assets disposal	21,061	36,931	78,378
Others	36,904	9,323	4,441
Other expenditures	506,539	119,754	132,427
Other expenses	S/ (326,754)	S/ (61,335)	S/ (32,869)

XML

Borrowings - Summary of Present value of Finance Lease Obligations (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure of finance lease agreements obligations [Line Items]
Present value of finance lease obligations	S/ 22,980	S/ 33,488
Maturity Period Less than One Year [member]
Disclosure of finance lease agreements obligations [Line Items]
Present value of finance lease obligations	9,749	13,514
Maturity Period Greater than One and Less than Five Year [member]
Disclosure of finance lease agreements obligations [Line Items]
Present value of finance lease obligations	S/ 13,231	S/ 19,974

XML

Investments In Associates And Joint Venture - Schedule of Movement of Investments in Joint Ventures (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of financial information of joint ventures [abstract]
Opening balance	S/ 7,483	S/ 18,618	S/ 103,356
Equity interest in results	2,219	1,599	6,039
Disposal of Investment		(10,112)	(88,556)
Dividends received	(1,517)	(1,823)	(3,758)
Conversion adjustment	(14)	79	334
Impairment Of Investment	(11)	(878)
Discontinued operations			1,203
Final balance	S/ 8,160	S/ 7,483	S/ 18,618

XML

Financial Risk Management - Schedule of Assets and Liabilities Equivalent to Functional Currency (Detail) S/ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands	Dec. 31, 2019 PEN (S/)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 COP ($)	Dec. 31, 2019 CLP ($)	Dec. 31, 2018 PEN (S/)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 COP ($)	Dec. 31, 2018 CLP ($)
Disclosure Of Financial Risk Management [line items]
Liabilities	S/ 1,723,108				S/ 2,139,714
Foreign exchange risk [member]
Disclosure Of Financial Risk Management [line items]
Assets	2,859,324	$ 862,021	$ 187,119,204	$ 19,915,617	2,273,132	$ 674,753	$ 163,560,697	$ 48,129,848
Liabilities	S/ 1,751,479	$ 528,031	$ 76,446,723	$ 39,193,917	S/ 2,042,176	$ 604,383	$ 76,978,655	$ 49,728,313

XML

Summary of Significant Accounting Policies - Additional Information (Detail) S/ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2019 PEN (S/)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 PEN (S/)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 PEN (S/)	Dec. 31, 2017 USD ($)
Viva GyM S.A. [member]
Basis Of Presentation And Summary Of Significant Accounting Policies [line items]
Estimated fair value	S/ 62.6	$ 18.7	S/ 64.3	$ 19.2
Morelco S.A.S. [member]
Basis Of Presentation And Summary Of Significant Accounting Policies [line items]
Put option period	10 years	10 years
GMD SA [member]
Basis Of Presentation And Summary Of Significant Accounting Policies [line items]
Net gain on sale of former subsidiary					S/ 218.3	$ 64.6
Chile (member)
Basis Of Presentation And Summary Of Significant Accounting Policies [line items]
Employees indemnity period	330 days	330 days
Peru [member]
Basis Of Presentation And Summary Of Significant Accounting Policies [line items]
Workers' profit sharing on taxable income, Percentage	5.00%	5.00%
Capitalised development expenditure [member]
Basis Of Presentation And Summary Of Significant Accounting Policies [line items]
Useful lives of wells	5 years	5 years
Right-of-use assets [member] | Land [member]
Basis Of Presentation And Summary Of Significant Accounting Policies [line items]
Estimated useful life	60 years	60 years
Bottom of range [member]
Basis Of Presentation And Summary Of Significant Accounting Policies [line items]
Percentage of voting rights held	20.00%	20.00%
Bottom of range [member] | Chile (member)
Basis Of Presentation And Summary Of Significant Accounting Policies [line items]
Workers' profit sharing on taxable income, Percentage	4.75%	4.75%
Bottom of range [member] | Contractual relationships with clients [member]
Basis Of Presentation And Summary Of Significant Accounting Policies [line items]
Estimated useful life	5 years	5 years
Bottom of range [member] | Computer software [member]
Basis Of Presentation And Summary Of Significant Accounting Policies [line items]
Estimated useful life	2 years	2 years
Bottom of range [member] | Investment property [member]
Basis Of Presentation And Summary Of Significant Accounting Policies [line items]
Estimated useful life of property	3 years	3 years
Top of range [member]
Basis Of Presentation And Summary Of Significant Accounting Policies [line items]
Percentage of voting rights held	50.00%	50.00%
Top of range [member] | Contractual relationships with clients [member]
Basis Of Presentation And Summary Of Significant Accounting Policies [line items]
Estimated useful life	9 years	9 years
Top of range [member] | Computer software [member]
Basis Of Presentation And Summary Of Significant Accounting Policies [line items]
Estimated useful life	15 years	15 years
Top of range [member] | Investment property [member]
Basis Of Presentation And Summary Of Significant Accounting Policies [line items]
Estimated useful life of property	33 years	33 years

XML

Summary of Significant Accounting Policies - Summary of Restatement of Statement of Income (Detail) - PEN (S/) S/ / shares in Units, S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure Of Restatement [line items]
Revenues	S/ 4,085,004	S/ 3,899,462	S/ 4,014,013
Gross profit	441,763	674,489	502,452
Administrative expenses	(213,908)	(278,433)	(322,454)
Other (expenses) income, net	(326,754)	(61,335)	(32,869)
Loss from the sale of investments		(7)	34,545
Operating (loss) profit	(98,899)	334,714	181,674
Financial expenses	(231,709)	(247,982)	(150,777)
Financial income	74,656	50,925	13,742
Share of the profit or loss in associates and joint ventures	(218,774)	(3,709)	473
Profit (loss) before income tax	(474,726)	133,948	45,112
Income tax expense	(319,957)	(113,318)	(46,305)
Profit (loss) from continuing operations	(794,683)	20,630	(1,193)
Profit (loss) from discontinued operations	(43,959)	36,785	210,431
Profit of the year	S/ (838,642)	S/ 57,415	S/ 209,238
Earnings per share attributable to owners of the Company during the year	S/ (1.076)	S/ (0.125)	S/ 0.225
Earning (loss) per share from continuing operations attributable to owners of the Company during the year	S/ (1.023)	S/ (0.099)	S/ (0.101)
Audited [member]
Disclosure Of Restatement [line items]
Revenues			S/ 6,080,142
Operating costs			(5,407,355)
Gross profit			672,787
Administrative expenses			(429,181)
Other (expenses) income, net			(20,545)
Loss from the sale of investments			274,363
Operating (loss) profit			497,424
Financial expenses			(185,445)
Financial income			15,407
Share of the profit or loss in associates and joint ventures			1,327
Profit (loss) before income tax			328,713
Income tax expense			(123,037)
Profit (loss) from continuing operations			205,676
Profit (loss) from discontinued operations		S/ 57,415	3,562
Profit of the year			S/ 209,238
Earnings per share attributable to owners of the Company during the year			S/ 0.225
Earning (loss) per share from continuing operations attributable to owners of the Company during the year			S/ 0.220
Increase (decrease) due to changes in accounting policy required by IFRSs [member]
Disclosure Of Restatement [line items]
Loss from the sale of investments			S/ (218,264)
Operating (loss) profit			(218,264)
Profit (loss) before income tax			(218,264)
Income tax expense			63,940
Profit (loss) from continuing operations			(154,324)
Profit (loss) from discontinued operations			154,324
Reclassification discontinued operations [member]
Disclosure Of Restatement [line items]
Revenues			(2,066,129)
Operating costs			1,895,794
Gross profit			(170,335)
Administrative expenses			106,727
Other (expenses) income, net			(12,324)
Loss from the sale of investments			(21,554)
Operating (loss) profit			(97,486)
Financial expenses			34,668
Financial income			(1,665)
Share of the profit or loss in associates and joint ventures			(854)
Profit (loss) before income tax			(65,337)
Income tax expense			12,792
Profit (loss) from continuing operations			(52,545)
Profit (loss) from discontinued operations			52,545
Restated and Reclassified [member]
Disclosure Of Restatement [line items]
Revenues			4,014,013
Operating costs			(3,511,561)
Gross profit			502,452
Administrative expenses			(322,454)
Other (expenses) income, net			(32,869)
Loss from the sale of investments			34,545
Operating (loss) profit			181,674
Financial expenses			(150,777)
Financial income			13,742
Share of the profit or loss in associates and joint ventures			473
Profit (loss) before income tax			45,112
Income tax expense			(46,305)
Profit (loss) from continuing operations			(1,193)
Profit (loss) from discontinued operations			210,431
Profit of the year			S/ 209,238
Earnings per share attributable to owners of the Company during the year			S/ 0.225
Earning (loss) per share from continuing operations attributable to owners of the Company during the year			S/ (0.101)

XML

Investments in Associates and Joint Ventures - Additional Information (Detail) S/ in Thousands, $ in Millions					1 Months Ended	12 Months Ended
	Apr. 24, 2017 PEN (S/)	Apr. 24, 2017 USD ($)	Jan. 24, 2017 PEN (S/)	Jan. 24, 2017 USD ($)	Nov. 30, 2015 PEN (S/)	Dec. 31, 2019 PEN (S/)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 PEN (S/)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 PEN (S/)	Dec. 31, 2016 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2017 USD ($)	Jan. 24, 2017 USD ($)	Dec. 31, 2016 PEN (S/)	Nov. 30, 2015 USD ($)
Disclosure of Investments in Associates and Joint Ventures [line items]
Investment in associate						S/ 28,875		S/ 250,282		S/ 250,053					S/ 286,403
Accounts receivable from related parties						36,658		34,903
Income tax expense						113,062		150,020		168,143
Compania Operadora de Gas del Amazonas SAC [member]
Disclosure of Investments in Associates and Joint Ventures [line items]
Percentage of interest in property	51.00%	51.00%
Agreed selling price	S/ 69,800	$ 21.5
Gasoducto Sur Peruano S.A. [member]
Disclosure of Investments in Associates and Joint Ventures [line items]
Ownership interest in associate					20.00%
Percentage of performance guarantee established in concession contract					20.00%
Performance guarantee required under concession agreement					S/ 887,000											$ 262.5
Percentage of collateral of bridge loan					21.49%
Collateral bridge loan					S/ 2,027,000											600.0
Value determined by audit firm as payable | $											$ 2,602.0
Accounts receivable claim										1,400			$ 0.4
Claims from fiduciary as administrator of the accounts receivable										572,100			$ 169.3
Impairment of investment						218,000	$ 65.0	739,000	$ 220.0
Impairment of long term account receivable						276,000	81.5
Discount Under Amortized Cost						58,000	17.0
Write-off of deferred tax asset						180,000	54.0
Effect of Change in Fair Value of Investments Before Taxes						552,000	163.5
Income tax expense						S/ 180,000	$ 54.0
Gasoducto Sur Peruano S.A. [member] | GSP Bridge Loan [member]
Disclosure of Investments in Associates and Joint Ventures [line items]
Guarantee obligation			S/ 433,300	$ 129.0
Gasoducto Sur Peruano S.A. [member] | Concession Agreement [member]
Disclosure of Investments in Associates and Joint Ventures [line items]
Guarantee obligation			176,400	$ 52.5
Accounts receivable from related parties			S/ 613,300											$ 181.5
Gasoducto Sur Peruano S.A. [member] | Capital Contributions [member]
Disclosure of Investments in Associates and Joint Ventures [line items]
Investment in associate					S/ 819,000											$ 242.5
Consorcio Constructor Ductos del Sur [member]
Disclosure of Investments in Associates and Joint Ventures [line items]
Ownership interest in associate					29.00%
Concesionaria Chavimochic S.A.C. [member]
Disclosure of Investments in Associates and Joint Ventures [line items]
Investment in associate | $												$ 647.0
Concession effective period						25 years	25 years
Palo Redondo Dam [member]
Disclosure of Investments in Associates and Joint Ventures [line items]
Percentage of work completed						70.00%	70.00%
Logistica Quimicos del Sur S.A. [member]
Disclosure of Investments in Associates and Joint Ventures [line items]
Dividends received						S/ 1,500		S/ 1,800		S/ 2,800

XML

Financial Income and Expenses (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Financial Income and Expenses

For the years ended on December 31, these items include the following:

	2017			2018			2019
Financial income:
Interest on loans to third parties		577			27,060			36,876
Fair value of accounts receivables		—			9,786			30,408
Interest on short-term bank deposits		5,123			3,811			4,056
Commissions and collaterals		12			1,448			535
Exchange rate gain, net		5,603			—			—
Others		2,427			8,820			2,781
		13,742			50,925			74,656
Financial expenses:
Interest expense:
- Bank loans		93,238			90,349			78,293
- Bonds		28,804			27,388			26,113
- Commissions and collaterals		15,537			31,668			24,521
- Loans from third parties		6,784			31,296			14,162
- Right-of-use		—			—			5,472
- Financial lease		4,722			2,908			2,042
Loss by measurement of financial asset fair value		8,059			25,796			41,131
Exchange difference loss, net		—			23,276			32,570
Derivative financial instruments		739			268			92
Other financial expenses		24,802			23,200			14,542
Less capitalized interest		(31,908	)		(8,167	)		(7,229	)
		150,777			247,982			231,709

XML

Loss Per Share (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Basic Earnings Per Share

The basic loss per common share is as follows:

		2017			2018			2019
Loss attributable to owners of the Company during the year			148,738			(83,188	)		(884,721	)
Weighted average number of shares in issue at S/1.00 each, at December 31,			660,053,790			665,835,490			822,213,119
Basic loss per share (in S/)	(*)		0.225			(0.125	)		(1.076	)
Loss from continuing operations attributable to owners of the Company during the year			(66,577	)		(65,888	)		(840,762	)
Weighted average number of shares in issue at S/1.00 each, at December 31,			660,053,790			665,835,490			822,213,119
Basic loss per share (S/)	(*)		(0.101	)		(0.099	)		(1.023	)

(*) The Group does not have common shares with dilutive effects at December 31, 2018 and 2019.

XML

Standards, Amendments and Interpretation Adopted in 2019 - Schedule of lease liabilities (Detail) S/ in Thousands	12 Months Ended
	Dec. 31, 2019 PEN (S/)
Disclosure of lese liabilities [line Items]
Impact of implementation 2019	S/ 97,706
Adjustments on contract fees	4,039
Addition of liabilities for right-of-use	101,745
Accrued interest	5,617
Amortization	(20,326)
Interest paid	(5,368)
Foreign currency translation effect	(11)
Exchange difference	(1,441)
Short-term liabilities for right-of-use	18,246
Long-term liabilities for right-of-use	61,970
Impact on liabilities	S/ 80,216

XML

Investments In Associates And Joint Ventures - Schedule of Amounts Recognised in Balance Sheet (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure Of Investments In Associates And Joint Ventures [abstract]
Associates	S/ 28,875	S/ 250,282	S/ 250,053	S/ 286,403
Joint ventures	8,160	7,483	S/ 18,618	S/ 103,356
Investments in associates and joint ventures	S/ 37,035	S/ 257,765

XML

Transactions with Related Parties and Joint Operators

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Transactions with Related Parties and Joint Operators

12 TRANSACTIONS WITH RELATED PARTIES AND JOINT OPERATORS

a) Transactions with related parties

Major transactions between the Company and its related parties are summarized as follows:

	2017		2018		2019
Revenue from sales of goods and services:
- Joint operations		18,138		56,560		44,130
- Associates		3,367		1,704		108
		21,505		58,264		44,238
Purchase of goods and services:
- Joint operations		14,191		601		1,765
- Associates		2,776		2,130		—
		16,967		2,731		1,765

Transactions between related parties are made based on current price lists and the terms and conditions are the same as those agreed with third parties.

b) Key management compensation

The key management includes directors (executives and non-executives), members of the Executive Committee and Internal Audit Management. Compensation paid or payable to key management in 2019 amounted to S/87.4 million, which includes S/0.4 million of discontinued operations (in 2018, the balance of S/58 million includes S/0.4 million corresponding to discontinued operations, S/90.5 million in 2017, which includes S/25.6 million to discontinued operations) and It only includes short-term benefits.

c) Balances at the end of the year were:

	At December 31,				At December 31,
	2018				2019
	Receivable		Payable		Receivable		Payable
Current portion:
Joint operations
Consorcio Rio Urubamba		9,122		—		9,042		—
Consorcio Peruano de Conservacion		6,417		—		3,592		—
Consorcio Italo Peruano		3,322		4,996		1,011		363
Consorcio Constructor Chavimochic		2,138		6,199		—		5,953
Consorcio GyM Conciviles		1,855		—		1,257		1,958
Consorcio La Gloria		1,369		1,006		1,750		1,017
Consorcio Ermitaño		781		624		831		440
Consorcio Terminales del Peru S.A.		459		—		1,176		—
Consorcio TNT Vial y Vives - DSD Chile Ltda		—		11,804		—		1,088
Consorcio Rio Mantaro		—		6,655		—		5,869
Consorcio Vial Quinua		—		1,970		—		2,048
Consorcio Huacho Pativilca		—		475		1,419		5,895
Consorcio CDEM		—		—		638		—
Consorcio GyM-Stracon		—		—		2,230		—
Consorcio GyM-OSSA		—		—		7,202		—
Consorcio Chicama Ascope		—		—		2,471		—
Other minors		9,215		11,323		1,407		2,102
		34,678		45,052		34,026		26,733
Other related parties
Ferrovías Argentina		—		10,242		—		12,183
Perú Piping Spools S.A.C.		225		—		2,632		—
Other minors		—		647		—		—
		225		10,889		2,632		12,183
Current portion		34,903		55,941		36,658		38,916
Non-current portion
Gasoducto Sur Peruano S.A.		773,927		—		544,842		—
Ferrovías Participaciones		—		21,849		—		22,583
Other minors		4,299		—		2,099		—
Non-current		778,226		21,849		546,941		22,583

Accounts receivable and payable are mainly of current maturity and have no specific guarantees; except for accounts receivable from GSP and Ferrovías participations. These balances do not generate interest considering their maturity in the short term. The balance of the GyM Conciviles Consortium includes S/31 million registered in 2018. These accounts do not bearn interests due to their short-term nature.

The non-current balance corresponds to the obligations arising from the early termination of the GSP project (Note 15 a-i). As of December 31, 2019, the book value of the non-current account receivable registered by the Company, for S/331 million, was recorded using the discounted cash flow method, at a rate of 3.46% that originated a discount of S/57 million (S/17.8 million in 2018). Additionally, as a result of the early termination of the GSP, and related facts, the subsidiary GyM S.A. it has balances from the Consorcio Constructor Ductos del Sur to those who had previously deteriorated in 2016, it was integrated in the consolidation under the proportional participation method. The value of accounts receivable from CCDS corresponds mainly to collection rights to GSP for S/270 million.

Transactions with non-controlling interests are disclosed in Note 35.

XML

Other Accounts Receivable - Schedule of Other Accounts Receivable (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Total
Advances To Suppliers	S/ 135,481	S/ 146,536
Value added tax receivables	45,910	105,238
Other receivables	444,500	588,451
Current
Advances to suppliers	135,481	81,719
Income tax on-account payments	70,647	91,353
VAT credit	31,646	79,076
Guarantee deposits	13,201	15,137
Other current receivables	444,500	588,451
Non-current
Advances to suppliers		64,817
VAT credit	14,264	26,162
Other non-current receivables	300,323	302,957
Others [member]
Current
Guarantee deposits	6,564	5,770
Non-current
Guarantee deposits	3,024
Gross carrying amount [member]
Total
Advances To Suppliers	135,481	146,536
Receivables from taxes other than income tax	70,647	91,353
Value added tax receivables	45,910	105,238
Deposits Not Classified As Cash Equivalents	181,400	180,010
Claims To Third Parties	79,772	62,163
Taxes Receivable	60,883	45,890
Restricted cash and cash equivalents	15,974	67,972
Receivables From Rental And Sale Of Properties	30,798	34,768
Receivables From Personnel	2,836	3,479
Other receivables	772,403	916,242
Current
Advances to suppliers	135,481	81,719
Income tax on-account payments	70,647	91,353
VAT credit	31,646	79,076
Guarantee deposits	98,046	167,769
Claims to third parties	38,875	62,163
Taxes receivable	30,233	20,246
Restricted funds	973	39,394
Rental and sale of equipment	30,798	34,768
Accounts receivable from personnel	2,836	3,479
Other current receivables	472,080	613,285
Non-current
Advances to suppliers	0	64,817
VAT credit	14,264	26,162
Guarantee deposits	83,354	12,241
Claims to third parties	40,897
Taxes receivable	30,650	25,644
Restricted funds	15,001	28,578
Other non-current receivables	300,323	302,957
Gross carrying amount [member] | Petroleos Del Peru S. A. Petroperu S.A. [member]
Total
Claims To Third Parties	80,941	75,750
Current
Claims to third parties	17,292	11,953
Non-current
Claims to third parties	63,649	63,797
Gross carrying amount [member] | Consorcio Constructor Ductos del Sur [member]
Total
Claims To Third Parties	27,782	52,114
Non-current
Claims to third parties	27,782	52,114
Gross carrying amount [member] | Consorcio Panorama [member]
Total
Claims To Third Parties	23,491	27,132
Current
Claims to third parties		5,306
Non-current
Claims to third parties	23,491	21,826
Gross carrying amount [member] | Others [member]
Total
Other Minors Receivable	16,488	23,837
Current
Other minors, Current	15,253	16,059
Non-current
Other Minor Non Current Receivables	1,235	7,778
Accumulated impairment [member]
Total
Other receivables	(27,580)	(24,834)
Current
Other current receivables	S/ (27,580)	S/ (24,834)

XML

Financial Instruments

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Financial Instruments

8 FINANCIAL INSTRUMENTS

8.1 Financial instruments by category

The classification of financial assets and liabilities by category is as follows:

	At December, 31
	2018		2019
Financial assets according to the statement of financial position
Loans and accounts receivable at amortized cost:
- Cash and cash equivalents		801,140		948,978
- Trade accounts receivable and other accounts receivable (excluding financial assets)		1,302,358		1,258,476
- Financial assets related to concession agreements		1,227,994		748,365
- Accounts receivable from related parties		813,129		36,658
		4,144,621		2,992,477

Financial assets related to concession agreements are recorded in the consolidated statement of financial position as the line items short-term trade accounts receivable and long-term trade accounts receivable.

	At December, 31
	2018		2019
Financial liabilities according to the statement of financial position
Other financial liabilities at amortized cost:
- Other financial liabilities		1,169,184		695,870
- Finance leases		33,488		22,980
- Lease liability for right-of-use asset		—		80,216
- Bonds		937,042		924,042
- Trade and other accounts payable (excluding non-financial liabilities)		1,453,933		1,364,131
- Accounts payable to related parties		77,790		61,499
		3,671,437		3,148,738
Hedging derivatives:
- Derivative financial instruments		61		52

8.2 Credit quality of financial assets

The credit quality of financial assets that are neither past due nor impaired can be assessed with reference to external risk ratings (if they exist), or based on historical information on the default rates of their counterparties.

As of December 31, the credit quality of financial assets is presented below:

	At December 31,
	2018		2019
Cash and cash equivalents (*)
Banco de Credito del Peru (A+)		350,403		302,743
Banco Continental (A+)		114,067		186,238
Citibank (A)		134,990		183,719
Banco Scotiabank (A+)		73,039		64,101
Banco de la Nacion (A)		23,766		56,085
Credicorp Capital Colombia (AAA)		—		44,338
Banco Interbank (A)		14,075		41,681
JP Morgan (AAA)		257		17,853
Santander Colombia (AAA)		—		15,183
Banco Scotiabank - Chile (A+)		—		9,801
Banco Bogota (BB+)		16,782		7,255
Banco Santander - Chile (AAA)		3,325		5,817
Banco Santander - Perú (A)		12,221		114
Fondo de Inversion Alianza (AA+)		39,051		46
Banco de crédito e Inversiones - Chile (AA+)		5,909		—
Others		8,312		7,017
		796,197		941,991

The risk ratings in the previous table of “A” and “AAA” represent high quality ratings. For banks in Peru, these risk ratings are obtained from the risk rating agencies authorized by the Superintendence of Banking, Insurance and AFP (SBS). For banks in Chile, ratings are obtained from the risk rating agencies authorized by the Superintendence of Securities and Insurance (SVS) of Chile (Fitch Chile Clasificadora de Riesgo Ltda. and ICR International Credit Rating Cia Clasificadora de Riesgo Ltda.). For banks in Colombia, ratings are obtained from the following financial institutions: Fitch Ratings, Value and Risk Rating S.A., BRC Standard and Poor’s Rating and Technical Committee of BRC Investor Services S.A. SCV.

(*) The difference between the balances shown and the balances of the statement of financial position correspond to cash and remittances in transit (Note 9).

The credit quality of customers is assessed in three categories (internal classification):

A: New customers/related parties (less than six months),

B: Existing customers/related parties (with more than six months of trade relationship) with no previous default history; and

C: Existing customers/related parties (with more than six months of trade relationship) with previous default history.

	2018		2019
Trade accounts receivable (Note 10)
Counterparties with no external risk rating
A		302,369		58,999
B		1,579,400		1,373,424
C		146,126		142,516
		2,027,895		1,574,939
Receivable from related parties and joint operators (Note 12)
B		813,129		583,599

The total balance of trade accounts receivable and accounts receivable from related parties is subject to the terms and conditions of the respective contract, none of which has been renegotiated.

XML

Trade Accounts Receivables, Net - Schedule of Current and Non-Current Unbilled Receivables (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure Of Accounts Receivable [line items]
Unbilled receivables	S/ 421,841	S/ 79,847
GYM S.A. [member]
Disclosure Of Accounts Receivable [line items]
Unbilled receivables	384,660	14,455
Concar S.A. [member]
Disclosure Of Accounts Receivable [line items]
Unbilled receivables	10,737	38,770
GMI S.A. [member]
Disclosure Of Accounts Receivable [line items]
Unbilled receivables	24,787	S/ 26,622
GMP S.A. [member]
Disclosure Of Accounts Receivable [line items]
Unbilled receivables	S/ 1,657

XML

Work in Progress, Net - Summary of Work in Progress Grouped by Main Projects (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Schedule Of Work In Progress [Line Items]
Unbilled WorkIn Progress	S/ 72,574	S/ 60,750
Infrastructure [member]
Schedule Of Work In Progress [Line Items]
Unbilled WorkIn Progress	23,117	32,212
Infrastructure [member] | Road Operation And Maintenance [Member]
Schedule Of Work In Progress [Line Items]
Unbilled WorkIn Progress	23,117	32,212
Engineering and construction [member]
Schedule Of Work In Progress [Line Items]
Unbilled WorkIn Progress	49,457	28,538
Engineering and construction [member] | Engineering and Construction Works GYM Chile SpA [Member]
Schedule Of Work In Progress [Line Items]
Unbilled WorkIn Progress	19,531	13,007
Engineering and construction [member] | Talara Refinery [Member]
Schedule Of Work In Progress [Line Items]
Unbilled WorkIn Progress	20,126
Engineering and construction [member] | North Concentrator Plant Of Quellaveco [Member]
Schedule Of Work In Progress [Line Items]
Unbilled WorkIn Progress	1,033
Engineering and construction [member] | Others [member]
Schedule Of Work In Progress [Line Items]
Unbilled WorkIn Progress	S/ 8,767	S/ 15,531

XML

Financial Risk Management

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Financial Risk Management

4 FINANCIAL RISK MANAGEMENT

Financial risk management is carried out by the Group’s Management. Management oversees the general management of financial risks, such as foreign exchange rate risk, price risk, cash flow, and fair value interest rate risk, credit risk, the use of derivative and non-derivative financial instruments and the investment of excess liquidity, which are supervised and monitored periodically.

4.1 Financial Risk Factors

The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk, fair value interest rate risk and cash flow interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial performance. The Group uses derivative financial instruments to hedge certain risk exposures in one of its subsidiaries and considers the use of other derivatives in the event that it identifies risks that may generate an adverse effect for the Group in the short and medium-term.

a) Market risks

i) Foreign exchange risk

The Group is exposed to exchange rate risk as a result of the transactions carried out locally in foreign currency and due to its operations abroad. As of December 31, 2018, and 2019 this exposure is mainly concentrated in fluctuations of U.S. dollar, the Chilean and Colombian Pesos.

At December 31, 2018 and 2019, the consolidated statement of financial position includes the following:

	2018				2019
	S/(000)		USD(000)		S/(000)		USD(000)
Assets		2,273,132		674,753		2,859,324		862,021
Liabilities		2,042,176		604,383		1,751,479		528,031

The Group’s exchange gains and losses for the Peruvian Sol, the Chilean and Colombian Pesos exposure against the U.S. dollar was:

	2017			2018			2019
Gain		329,751			382,104			390,008
Loss		(323,927	)		(405,380	)		(422,578	)

If at December 31, 2019 the Peruvian Sol, the Chilean and Colombian Pesos had strengthened/weakened by 2% against the U.S. dollar, with all other variables held constant, the pre-tax results for the year would have increased/decreased by S/0.7 million (S/0.5 million in 2018 and S/0.1 million in 2017).

The consolidated statement of changes in equity comprises a foreign currency translation adjustment originated by its subsidiaries. The consolidated statement of financial position includes assets and liabilities in functional currency equivalent to (in thousands):

	2018				2019
	Assets		Liabilities		Assets		Liabilities
Chilean Pesos		48,129,848		49,728,313		19,915,617		39,193,917
Colombian Pesos		163,560,697		76,978,655		187,119,204		76,446,723

The Group’s foreign exchange translation adjustment in 2019 was negative by S/8.2 million (positive by S/5.7 million in 2018 and negative by S/11.3 million in 2017).

ii) Price risk

Management considers that the exposure of the Group to the price risk of its investments in mutual funds, bonds, and equity securities is low since the invested amounts are not significant. Any fluctuation in their fair value will not have any significant impact on the balances reported in the consolidated financial statements.

iii) Cash flow and fair value interest rate risk

The Group’s interest rate risk mainly arises from its long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. Group policy is to maintain most of its borrowings at fixed rate instruments; 61.8% of total debt in 2019 (46.9% in 2018) was contracted at fixed rates and 38.2% at variable rates (53.1% in 2018) which consisted of a 37.7% fixed rate plus VAC (adjusted for inflation) and the remaining 0.5% at a variable rate (27.7% fixed rate + VAC and the remaining 25.4% at a variable rate in 2018).

The debt subject to fixed rate plus VAC is related to a bond issued in Peruvian Sol to finance the GyM Ferrovias Project, Metro Line 1 (Note 19). Any increase in the interest rate resulting from higher inflation will have no significant impact on the Group’s profit because these revenues are also adjusted for inflation.

During 2018 and 2019 borrowings at variable rates are denominated in Peruvian Sol, and U.S. dollars and the Group’s policy is to manage their cash flow risk by using interest-rate swaps, which are recognized under hedge accounting. In 2018, the variable rate loans related to GSP (Note 18 a-ii), were not hedged, Management decided to assume the risk since it was expected to pre-pay them before due.

If on December 31, 2019, if the Libor rate plus three months had increased/decreased by 5%, with all other variables held constant, the pre-tax results for the year would have increased/decreased by S/0.01 million (S/0.75 million in 2018). In 2019 and 2018 there was no significant ineffectiveness in the cash flow hedge.

b) Credit risk

Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as customer credit counterparties, including the outstanding balance of accounts receivable and committed transactions. For banks and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted.

Concerning to loans to related parties, the Group has measures in place to ensure the recovery of these loans through the controls maintained by the Corporate Finance Management and the performance evaluation conducted by the Board.

Management does not expect the Group to incur any losses from the performance by these counterparties, except for the ones already recorded at the financial statements.

c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents, the availability of funding through an adequate number of sources of committed credit facilities and the capacity to close out positions in the market. Historically, the Group cash flows enabled it to maintain sufficient cash to meet its obligations. However, since 2017, the Group experienced liquidity problems due to the early termination of the GSP concession agreement and the obligations assumed (Note 15 a-i). As a consequence, the Group started a disinvestment plan to be able to meet the obligations resulting from this scenario (Note 36). This plan was met and the GSP debt was terminated. Due to the Covid 19 pandemic as explained in note 37, the Group has considered measures to reduce risk exposure and has implemented a new plan in order to meet its requirements of cash for the different businesses.

Group Corporate Finance monitors rolling forecasts of the Group’s liquidity requirements to ensure it exists sufficient cash to meet operational needs so that the Group does not breach borrowing limits or covenants, where applicable, on any of its borrowing facilities. Less significant financing transactions are controlled by the Finance Management of each subsidiary.

Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal ratio targets in the statement of financial position and, if applicable, external regulatory or legal requirements, for example, foreign currency restrictions.

Surplus cash held by the operating entities over the balance required for working capital management is invested in interest-bearing checking accounts or time deposits, selecting instruments with appropriate maturities and sufficient liquidity.

The table below analyzes the Group’s financial liabilities into relevant maturity groupings based on the remaining period from the date of the consolidated statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

	Less than 1 year		1-2 years		2-5 years		More than 5 years		Total
At December 31, 2018
Other financial liabilities (except for finance leases)		816,122		273,079		129,233		41,577		1,260,011
Finance leases		15,151		7,489		14,094		—		36,734
Bonds		111,080		153,287		355,667		1,174,404		1,794,438
Trade accounts payables (except non-financial liabilities)		980,723		—		—		—		980,723
Accounts payables to related parties		55,941		21,849		—		—		77,790
Other accounts payables (except non-financial liabilities)		116,806		17,777		338,627		—		473,210
Other non-financial liabilities		—		61		—		—		61
		2,095,823		473,542		837,621		1,215,981		4,622,967

	Less than 1 year		1-2 years		2-5 years		More than 5 years		Total
At December 31, 2019
Other financial liabilities (except for finance leases and lease liability for right-of-use asset)		479,000		147,473		177,018		—		803,491
Finance leases		10,826		3,467		13,346		—		27,639
Lease liability for right-of-use asset		24,966		38,788		31,167		7,603		102,524
Bonds		115,690		157,516		358,461		1,077,960		1,709,627
Trade accounts payables (except non-financial liabilities)		966,620		—		—		—		966,620
Accounts payables to related parties		38,916		21,747		—		836		61,499
Other accounts payables (except non-financial liabilities)		200,098		2,505		194,908		—		397,511
Other non-financial liabilities		—		52		—		—		52
		1,836,116		371,548		774,900		1,086,399		4,068,963

4.2 Capital management risk

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure to minimize the cost of capital. In 2017 the situation of the Group had lead Management to monitor deviations that might cause the non-compliance of covenants and may hinder the renegotiation of liabilities (Note18-a). In extraordinary events as explained in note 37, the Group identifies the possible deviations and requirements and establishes a plan.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The Group monitors capital based on the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including current and non-current borrowings), less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated statement of financial position plus net debt.

As of December 31, 2018, and 2019, the gearing ratio is presented below indicating the Group’s strategy to keep it in a range from 0.10 to 0.70.

	2018			2019
Total financial liabilities and bonds		2,139,714			1,723,108
Less: Cash and cash equivalents		(801,140	)		(948,978	)
Net debt		1,338,574			774,130
Total equity		2,489,931			1,876,085
Total capital		3,828,505			2,650,215
Gearing ratio		0.35			0.29

4.3 Fair value estimation

For the classification of the type of valuation used by the Group for its financial instruments at fair value, the following levels of measurement have been established.

• Level 1: Measurement based on quoted prices in active markets for identical assets or liabilities.

• Level 2: Measurement based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

• Level 3: Measurement based on inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs, generally based on internal estimates and assumptions of the Group).

The table below shows the Group’s assets and liabilities measured at fair value on December 31, 2018, and 2019:

	Level 2
At December 31, 2018
Financial liabilities
Derivatives used for hedging		61
At December 31, 2019
Financial liabilities
Derivatives used for hedging		52

4.4 COVID-19 Pandemic

As a result of the outbreak of Coronavirus 2019 (COVID-19), the Group’s results of operations, financial positions and cash flows have been adversely affected as of the date of this report with potential impacts on subsequent periods, including but not limited to the significant decline in revenue and significant operating cash flow. The impacts may also include additional allowance for doubtful accounts and impairment to the Group’s long-term assets. Because of the significant uncertainties surrounding the COVID-19, the exact financial impact is unpredictable and will depend on future developments, including new information which may emerge concerning the duration of the lockdown which has been extended until June 30th for Perú, until September 18th for Chile and until August 31st for Colombia, the actions taken by authorities and other entities to contain the COVID-19 outbreak, among others, all of which are beyond the Group’s control. The Group will continue to closely monitor the impacts of COVID-19 through the course of the year 2020.

From mid-March until the end of May 2020, substantially all of our engineering and construction and real estate projects in Perú were mandatorily shut down, however, as part of the Government plan to activate some industries by stages, most of our projects of our engineering and construction and real estate segments are gradually resuming. In Colombia the projects under execution were declare as essential projects therefore they continued operating since the beginning of the lockdown. Finally our projects in Chile were shut down but only for few days, after which they resume operations. Our infrastructure operations, were declared essential businesses, therefore have continue operating.

On the liquidity side, the Company has implemented a plan that includes several measures to reduce expenses and preserve cash in response to the ongoing COVID-19 pandemic, including the following: (i) developing a 12-week cash plan, project-by-project, to ensure that the Company will continue to meet its critical obligations during that period, which plan is monitored and updated weekly; (ii) preparing a cash plan for the remainder of the 2020 fiscal year, to identify in advance key liquidity issues that may arise; (iii) identifying and renegotiating certain of the company’s obligations with respect to its suppliers, banks and other third parties; (iv) identifying and reducing non-essential general expenses across the group; (v) reducing headcount, and temporarily reducing salaries of senior management, across the company’s three segments; and (vi) reducing capital expenditures across the company’s subsidiaries. In addition the Group is evaluating the selling of minor assets that will help finance any deficit during the year.

XML

Financial Income and Expenses

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Financial Income and Expenses

27 FINANCIAL INCOME AND EXPENSES

For the years ended on December 31, these items include the following:

	2017			2018			2019
Financial income:
Interest on loans to third parties		577			27,060			36,876
Fair value of accounts receivables		—			9,786			30,408
Interest on short-term bank deposits		5,123			3,811			4,056
Commissions and collaterals		12			1,448			535
Exchange rate gain, net		5,603			—			—
Others		2,427			8,820			2,781
		13,742			50,925			74,656
Financial expenses:
Interest expense:
- Bank loans		93,238			90,349			78,293
- Bonds		28,804			27,388			26,113
- Commissions and collaterals		15,537			31,668			24,521
- Loans from third parties		6,784			31,296			14,162
- Right-of-use		—			—			5,472
- Financial lease		4,722			2,908			2,042
Loss by measurement of financial asset fair value		8,059			25,796			41,131
Exchange difference loss, net		—			23,276			32,570
Derivative financial instruments		739			268			92
Other financial expenses		24,802			23,200			14,542
Less capitalized interest		(31,908	)		(8,167	)		(7,229	)
		150,777			247,982			231,709

XML

Segment Reporting - Disclosure of Detailed Information About Operating Segment Performance (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of detailed information about operating segment performance [line items]
Revenue	S/ 4,085,004	S/ 3,899,462	S/ 4,014,013
Gross profit (loss)	441,763	674,489	502,452
Administrative expenses	(213,908)	(278,433)	(322,454)
Other income and expenses, net	(326,754)	(61,335)	(32,869)
Gain from the sale of investments		(7)	34,545
Operating (loss) profit	(98,899)	334,714	181,674
Financial expenses	(231,709)	(247,982)	(150,777)
Financial income	74,656	50,925	13,742
Share of profit or loss in associates and joint ventures	(218,774)	(3,709)	473
Profit (loss) before income tax	(474,726)	133,948	45,112
Income tax expense	(319,957)	(113,318)	(46,305)
(Loss) profit from continuing operations	(794,683)	20,630	(1,193)
Profit (loss) from discontinued operations	(43,959)	36,785	210,431
(Loss) profit for the year	(838,642)	57,415	209,238
(Loss) profit from attributable to:
Owners of the Company	(884,721)	(83,188)	148,738
Non-controlling interest	46,079	140,603	60,500
Profit (loss) for the period	(838,642)	57,415	209,238
Parent company operations [member]
Disclosure of detailed information about operating segment performance [line items]
Revenue	87,476	62,098	70,050
Gross profit (loss)	(2,168)	(10,564)	(37,771)
Administrative expenses	(40,402)	(62,890)	(100,968)
Other income and expenses, net	(305,749)	(47,779)	10,512
Gain from the sale of investments			(18,672)
Operating (loss) profit	(348,319)	(121,233)	(146,899)
Financial expenses	(101,914)	(115,077)	(81,310)
Financial income	73,832	31,752	35,431
Dividends	12,688
Share of profit or loss in associates and joint ventures	(711,962)	84,138	142,595
Profit (loss) before income tax	(1,075,675)	(112,076)	(50,183)
Income tax expense	(196,219)	22,867	44,032
(Loss) profit from continuing operations	(1,271,894)	(89,209)	(6,151)
Profit (loss) from discontinued operations	(42,857)	(3,709)	123,603
(Loss) profit for the year	(1,314,751)	(92,918)	117,452
(Loss) profit from attributable to:
Owners of the Company	(1,304,675)	(85,715)	125,182
Non-controlling interest	(10,076)	(7,203)	(7,730)
Profit (loss) for the period	(1,314,751)	(92,918)	117,452
Elimination of intersegment amounts [member]
Disclosure of detailed information about operating segment performance [line items]
Revenue	(651,492)	(636,882)	(483,405)
Gross profit (loss)	(49,637)	(15,612)	(43,795)
Administrative expenses	61,201	40,080	51,768
Other income and expenses, net	(921)	660	560
Gain from the sale of investments			4,215
Operating (loss) profit	10,643	25,128	12,748
Financial expenses	38,219	24,735	27,471
Financial income	(46,967)	(42,359)	(42,603)
Dividends	(12,688)
Share of profit or loss in associates and joint ventures	493,995	(100,811)	(175,144)
Profit (loss) before income tax	483,202	(101,651)	(177,528)
Income tax expense	(1,118)	(834)	(101)
(Loss) profit from continuing operations	482,084	(102,485)	(177,629)
Profit (loss) from discontinued operations	(1,102)	(3,602)	9,991
(Loss) profit for the year	480,982	(106,087)	(167,638)
(Loss) profit from attributable to:
Owners of the Company	480,766	(91,811)	(140,992)
Non-controlling interest	216	(14,276)	(26,646)
Profit (loss) for the period	480,982	(106,087)	(167,638)
Operating segments [member] | Engineering and Construction [member]
Disclosure of detailed information about operating segment performance [line items]
Revenue	2,797,326	1,960,863	2,331,907
Gross profit (loss)	98,362	62,095	176,473
Administrative expenses	(141,421)	(136,066)	(188,162)
Other income and expenses, net	9,937	(13,515)	(46,445)
Operating (loss) profit	(33,122)	(87,486)	(58,134)
Financial expenses	(74,171)	(82,861)	(46,655)
Financial income	5,643	15,122	8,491
Share of profit or loss in associates and joint ventures	(3,558)	11,366	30,982
Profit (loss) before income tax	(105,208)	(143,859)	(65,316)
Income tax expense	(35,457)	14,361	877
(Loss) profit from continuing operations	(140,665)	(129,498)	(64,439)
Profit (loss) from discontinued operations		44,096	76,837
(Loss) profit for the year	(140,665)	(85,402)	12,398
(Loss) profit from attributable to:
Owners of the Company	(137,110)	(86,857)	12,078
Non-controlling interest	(3,555)	1,455	320
Profit (loss) for the period	(140,665)	(85,402)	12,398
Operating segments [member] | Energy infrastructure [member]
Disclosure of detailed information about operating segment performance [line items]
Revenue	552,584	560,506	436,876
Gross profit (loss)	108,291	120,360	71,825
Administrative expenses	(24,230)	(20,898)	(15,854)
Other income and expenses, net	606	1,243	5,138
Operating (loss) profit	84,667	100,705	61,109
Financial expenses	(13,266)	(15,631)	(13,423)
Financial income	2,033	4,593	1,965
Share of profit or loss in associates and joint ventures	2,293	1,608	1,584
Profit (loss) before income tax	75,727	91,275	51,235
Income tax expense	(22,911)	(26,275)	(13,151)
(Loss) profit from continuing operations	52,816	65,000	38,084
(Loss) profit for the year	52,816	65,000	38,084
(Loss) profit from attributable to:
Owners of the Company	48,056	59,866	33,714
Non-controlling interest	4,760	5,134	4,370
Profit (loss) for the period	52,816	65,000	38,084
Operating segments [member] | Toll roads infrastructure [member]
Disclosure of detailed information about operating segment performance [line items]
Revenue	633,301	733,148	642,127
Gross profit (loss)	96,164	107,092	139,196
Administrative expenses	(28,623)	(35,626)	(32,453)
Other income and expenses, net	(47,998)	(11)	1,061
Operating (loss) profit	19,543	71,455	107,804
Financial expenses	(27,297)	(26,691)	(6,892)
Financial income	2,245	2,560	3,257
Profit (loss) before income tax	(5,509)	47,324	104,169
Income tax expense	(17,112)	(15,737)	(32,290)
(Loss) profit from continuing operations	(22,621)	31,587	71,879
(Loss) profit for the year	(22,621)	31,587	71,879
(Loss) profit from attributable to:
Owners of the Company	(28,270)	26,731	55,620
Non-controlling interest	5,649	4,856	16,259
Profit (loss) for the period	(22,621)	31,587	71,879
Operating segments [member] | Transportation infrastructure [member]
Disclosure of detailed information about operating segment performance [line items]
Revenue	397,853	586,329	365,771
Gross profit (loss)	119,464	122,567	48,696
Administrative expenses	(17,991)	(12,007)	(15,279)
Other income and expenses, net	(2,661)	31	5
Operating (loss) profit	98,812	110,591	33,422
Financial expenses	(10,948)	(20,604)	(8,000)
Financial income	33,215	35,147	3,606
Profit (loss) before income tax	121,079	125,134	29,028
Income tax expense	(39,634)	(38,017)	(9,544)
(Loss) profit from continuing operations	81,445	87,117	19,484
(Loss) profit for the year	81,445	87,117	19,484
(Loss) profit from attributable to:
Owners of the Company	61,084	65,338	14,613
Non-controlling interest	20,361	21,779	4,871
Profit (loss) for the period	81,445	87,117	19,484
Operating segments [member] | Water treatment infrastructure [member]
Disclosure of detailed information about operating segment performance [line items]
Revenue	3,555	3,270	3,152
Gross profit (loss)	500	592	445
Administrative expenses	(397)	(296)	(317)
Other income and expenses, net	12
Operating (loss) profit	115	296	128
Financial expenses	(12)	6	(50)
Financial income	826	554	26
Profit (loss) before income tax	929	856	104
Income tax expense	(506)	(517)	(228)
(Loss) profit from continuing operations	423	339	(124)
(Loss) profit for the year	423	339	(124)
(Loss) profit from attributable to:
Owners of the Company	423	339	(124)
Profit (loss) for the period	423	339	(124)
Operating segments [member] | Real estate [member]
Disclosure of detailed information about operating segment performance [line items]
Revenue	264,401	630,130	647,535
Gross profit (loss)	70,787	287,959	147,383
Administrative expenses	(22,045)	(50,730)	(21,189)
Other income and expenses, net	20,020	(1,971)	(3,700)
Gain from the sale of investments			49,002
Operating (loss) profit	68,762	235,258	171,496
Financial expenses	(42,320)	(11,859)	(21,918)
Financial income	3,829	3,556	3,569
Share of profit or loss in associates and joint ventures	458	(10)	456
Profit (loss) before income tax	30,729	226,945	153,603
Income tax expense	(7,000)	(69,166)	(35,900)
(Loss) profit from continuing operations	23,729	157,779	117,703
(Loss) profit for the year	23,729	157,779	117,703
(Loss) profit from attributable to:
Owners of the Company	(4,995)	28,921	48,647
Non-controlling interest	28,724	128,858	69,056
Profit (loss) for the period	S/ 23,729	S/ 157,779	S/ 117,703

XML

Segment Reporting - Disclosure of Profit before Income Tax Reconciles to EBITDA (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of operating segments [abstract]
Net profit (loss)	S/ (838,642)	S/ 57,415	S/ 209,238
Financial income and expenses	157,053	197,057	137,035
Income tax	319,957	113,318	46,305
Depreciation and amortization	202,630	189,509	179,725
EBITDA	S/ (159,002)	S/ 557,299	S/ 572,303

XML

Contingencies, Committments and Warranties

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Contingencies, Committments and Warranties

31 CONTINGENCIES, COMMITMENTS, AND WARRANTIES

In the opinion of Management and its legal advisors, the provisions registered mainly for labor and tax claims are sufficient to cover the results of these probable contingencies. (Note 22).

a) Tax contingencies

The Company considers that the maximum exposure for tax contingencies of the Group amounts to S/71.4 million according to the following detail:

Contentious Administrative Process before the Judiciary regarding the assessment of IGV or VAT tax from 1998 to 2002 for S/0.6 million and for Income Tax and IGV or VAT tax from 2001 for S/3.3 million.

The appeal before SUNAT of income tax assessments from 2012 to 2016 amounting to S/48.5 million (S/37.5 million correspond to GyM SA, S/3.7 million to Viva GyM SA, S/6.1 million to GMI SA and S/1.2 million by Consorcio Río Mantaro).

The appeal before the Tax Court regarding VAT tax assessments for 2014 amounting to S/2.7 million (corresponding to the Consortium Constructor Ductos del Sur); income tax assessments from 2009 to 2013 equal to S/16.1 million (S/14.7 million for the Company, S/1.4 million for Viva GyM SA) and Non-domiciliated Income Tax for 2011 amounting to S/0.1 million corresponding to Viva GyM S.A.

Management believes that all the processes mentioned above will be favorable considering their characteristics and the evaluation of their legal advisors.

b) Other contingencies

Civil lawsuits, demanding compensation of damages, contract terminations and the enforcement of payment obligations S/17.1 million (S/0.3 million for GyM SA, S/15.4 million correspond to Consorcio Constructor Ductos del Sur., S/0.6 million to Consorcio Peruano de Conservacion, S/0.1 to Las Lomas SAC, S/0.5 million to Consorcio Rio Urubamba and S/0.1 million to Consorcio Vial Ayacucho)

Administrative contentious proceedings amounting to S/0.6 million in fines imposed by OSINERGMIN to GMP S.A.

Administrative processes amounting to S/2.5 million (S/1.08 million correspond to Viva GyM SA, S/0.2 million to Consorcio Toromocho, S/0.2 million to GMP SA, S/0.34 million to GMVBS SA, S/0.25 million to GyM SA, S/0.34 million to Inmobiliaria Almonte SAC and S/0.05 million to Terminales del Perú)

Labor dispute processes amounting to S/16.76 million (S/2.03 million correspond to Concar SA, S/1.52 million to Consorcio GyM - Conciviles, S/1 million to Consorcio Lima Commercial Activities, S/2.04 million to GMP SA, S/8.9 million to GyM SA, S/0.35 million to Morelco SA, S/0.30 million to Consorcio Rio Mantaro, S/0.15 million to Consorcio Tren electric, S/0.14 million to GyM International Operations SAC, S/0.03 million to Vial y Vives and S/0.3 million to Servisel SA).

c) Letters bonds and guarantees

The Group maintains letters of guarantee and guarantees in force in various financial institutions guaranteeing operations for US $ 376.1 million and US $ 13.9 million, respectively (US$471.6 million and US$13.9 million, respectively, as of December 31, 2018).

XML

Borrowings - Summary of Other Financial Liabilities (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure of detailed information about borrowings [line items]
Total	S/ 799,066	S/ 1,202,672
Current borrowings	454,260	826,474
Non-current borrowings	344,806	376,198
Bank Overdrafts [member]
Disclosure of detailed information about borrowings [line items]
Total		119
Current borrowings		119
Bank loans [member]
Disclosure of detailed information about borrowings [line items]
Total	553,658	1,023,481
Current borrowings	424,362	810,188
Non-current borrowings	129,296	213,293
Finance Leases Liabilities [member]
Disclosure of detailed information about borrowings [line items]
Total	22,980	33,488
Current borrowings	9,749	13,514
Non-current borrowings	13,231	19,974
Lease liability for right-of-use asset [member]
Disclosure of detailed information about borrowings [line items]
Total	80,216
Current borrowings	18,246
Non-current borrowings	61,970
Other financial liabilities [member]
Disclosure of detailed information about borrowings [line items]
Total	142,212	145,584
Current borrowings	1,903	2,653
Non-current borrowings	S/ 140,309	S/ 142,931

XML

Other Accounts Receivable (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Other Accounting Recivables

At December 31, this account comprises:

	Total						Current						Non-current
	2018			2019			2018			2019			2018		2019
Advances to suppliers (a)		146,536			135,481			81,719			135,481			64,817		—
Income tax on-account payments (b)		91,353			70,647			91,353			70,647			—		—
VAT credit (c)		105,238			45,910			79,076			31,646			26,162		14,264
Guarantee deposits (d)		180,010			181,400			167,769			98,046			12,241		83,354
Claims to third parties (e)		62,163			79,772			62,163			38,875			—		40,897
Petroleos del Peru S.A.- Petroperu S.A. (f)		75,750			80,941			11,953			17,292			63,797		63,649
ITAN and other tax receivable		45,890			60,883			20,246			30,233			25,644		30,650
Restricted funds (g)		67,972			15,974			39,394			973			28,578		15,001
Rental and sale of equipment - GyM S.A. projects		34,768			30,798			34,768			30,798			—		—
Accounts receivable from personneel		3,479			2,836			3,479			2,836			—		—
Consorcio Constructor Ductos del Sur (h)		52,114			27,782			—			—			52,114		27,782
Consorcio Panorama		27,132			23,491			5,306			—			21,826		23,491
Other minors		23,837			16,488			16,059			15,253			7,778		1,235
		916,242			772,403			613,285			472,080			302,957		300,323
Impairment		(24,834	)		(27,580	)		(24,834	)		(27,580	)		—		—
		891,408			744,823			588,451			444,500			302,957		300,323

Schedule of Advances to Suppliers

(a) Advance to suppliers - corresponds mainly to the following:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Alsthom Transporte - Linea 1		66,395		2,597		1,578		2,597		64,817		—
Advances - Refineria Talara		9,755		48,303		9,755		48,303		—		—
Advances - joint operations vendors		42,410		49,181		42,410		49,181		—		—
Others		27,976		35,400		27,976		35,400		—		—
		146,536		135,481		81,719		135,481		64,817		—

Schedule of Income Tax Payments

(b) Income tax on-account payments, consist of income tax payments and credits in the following subsidiaries:

	Current
	2018		2019
GyM S.A.		55,377		45,628
GMI S.A.		3,877		7,203
GMP S.A.		8,511		2,400
Concar S.A.		8,563		3,709
Viva GyM S.A.		8,114		3,485
Graña y Montero S.A.A.		6,463		2,895
Norvial S.A.		—		4,266
Survial S.A.		334		426
Others		114		635
		91,353		70,647

Schedule of Tax Credit Related to VAT on Subsidiaries

(c) Tax credit related to VAT on the following subsidiaries:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
GyM S.A.		39,183		12,963		38,653		12,963		530		—
GyM Ferrovias S.A.		25,453		11,970		25,453		11,970		—		—
Graña y Montero S.A.A.		9,821		—		9,821		—		—		—
Concar S.A.		2,382		1,653		2,382		1,653		—		—
Survial SA.		—		1,817		—		1,817		—		—
GMI S.A.		589		1,513		589		1,513		—		—
Viva GyM S.A.		7,255		6,874		511		513		6,744		6,361
Negocios del Gas S.A.		8,411		—		—		—		8,411		—
GMP S.A.		456		396		456		396		—		—
Norvial S.A.		1,997		—		—		—		1,997		—
Concesionaria Vesur S.A.		6,074		—		1,015		—		5,059		—
Others		3,617		8,724		196		821		3,421		7,903
		105,238		45,910		79,076		31,646		26,162		14,264

Schedule of guarantee deposits

These deposits are retained by customers to ensure the subsidiary’s compliance with its obligations under the contracts. The amounts retained will be recovered once the work is completed.

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Talara Refinery		72,992		55,567		72,992		308		—		55,259
Retention Toquepala		15,633		19,630		15,633		19,630		—		—
Retention Minera Teck		2,848		16,075		2,848		16,075		—		—
Retention Quellaveco		2,996		15,926		2,996		15,926		—		—
Joint operations retention		43,268		29,575		43,268		15,654		—		13,921
Retention Morelco		16,282		15,261		16,282		15,261		—		—
Retention Marcobre		—		5,052		—		5,052		—		—
SBLC guarantees - Sale of CAM Chile S.p.A.		20,221		14,726		7,980		3,576		12,241		11,150
Others		5,770		9,588		5,770		6,564		—		3,024
		180,010		181,400		167,769		98,046		12,241		83,354

XML

Workers' Profit Sharing - Summary of Worker's Profit Sharing (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure employees participation [line items]
Workers profit sharing	S/ 6,340	S/ 7,862	S/ 9,777
Cost of sales of goods and services [member]
Disclosure employees participation [line items]
Workers profit sharing	4,661	5,274	2,215
Administrative expenses [member]
Disclosure employees participation [line items]
Workers profit sharing	S/ 1,679	S/ 2,588	S/ 7,562

XML

Cash and Cash Equivalents (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Cash and Cash Equivalents

At December 31 this account comprises:

	2018		2019
Cash on hand		1,377		1,323
Remittances in-transit		3,566		5,664
Bank accounts		313,253		223,378
Escrow account (a)		334,579		552,439
Time deposits (b)		148,365		166,174
		801,140		948,978

Summary Of Detailed Information About Cash And Cash Equivalents Explanatory

	2018		2019
Reserve funds issued bonds		146,590		199,192
Real estate projects		38,961		31,794
Engineering and construction projects Colombia		39,084		44,457
Engineering and construction projects Peru		47,538		192,069
Infrastructure projects		62,406		84,927
		334,579		552,439

Summary of Time Deposits from Subsidiaries

(b) Time deposits have maturities less than 90 days and may be renewed upon maturity. These deposits earn interest that fluctuates between 1.15% and 2.85%.

	Financial entities		Interest rate			2018		2019
GyM Ferrovias S.A.		Banco de Credito del Peru		2.70	%		32,000		32,300
GyM Ferrovias S.A.		Banco Continental		1.15	%		—		69,531
GyM S.A.		Banco de Credito del Peru		2.40	%		1,906		28,213
Survial S.A.		Banco de Credito del Peru		2.85	%		—		15,400
GMI S.A.		Banco de Credito del Peru		2.52	%		—		9,993
Graña y Montero S.A.A.		Banco de Credito del Peru		2.40	%		110,281		5,312
Norvial S.A.		Banco de Credito del Peru		2.85	%		—		4,763
Concesion Canchaque S.A.C.		Banco de Credito del Peru		2.85	%		—		662
Concesionaria la Chira S.A.		Banco de Credito del Peru		2.50	%		4,170		—
GMP S.A.		Banco de Credito del Peru		2.50	%		7		—
Viva GyM S.A.		Banco de Credito del Peru		2.50	%		1		—
							148,365		166,174

Summary of Reconcile to the Amount of Cash Shown in the Statement of Cash Flow

The above figures are reconciled with the amount of cash shown in the consolidated statement of cash flows at the end of the year as follows:

	2017			2018			2019
Cash and cash equivalent on consolidated statement of financial position		626,180			801,140			948,978
Bank overdrafts (Note 18)		(120	)		(119	)		—
Balances per consolidated statement of cash flows		626,060			801,021			948,978

XML

Financial Income and Expenses - Summary of Financial Income and Expenses (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Financial income:
Interest on loans to third parties	S/ 36,876	S/ 27,060	S/ 577
Fair value of accounts receivables	30,408	9,786
Interest on short-term bank deposits	4,056	3,811	5,123
Commissions and collaterals	535	1,448	12
Exchange rate gain, net			5,603
Others	2,781	8,820	2,427
Finance income	74,656	50,925	13,742
Interest expense:
- Bank loans	78,293	90,349	93,238
- Bonds	26,113	27,388	28,804
- Commissions and collaterals	24,521	31,668	15,537
- Loans from third parties	14,162	31,296	6,784
- Right-of-use	5,472
- Financial lease	2,042	2,908	4,722
Loss by measurement of financial asset fair value	41,131	25,796	8,059
Exchange difference loss, net	32,570	23,276
Derivative financial instruments	92	268	739
Other financial expenses	14,542	23,200	24,802
Less capitalized interest	(7,229)	(8,167)	(31,908)
Finance costs	S/ 231,709	S/ 247,982	S/ 150,777

XML

Borrowings - Summary of Minimum Payment by Maturity and Present Value of Finance Lease Obligations (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure of finance lease agreements obligations [Line Items]
Minimum finance lease payments payable	S/ 27,639	S/ 36,734
Future financial charges on finance leases	(4,659)	(3,246)
Present value of the obligations for finance lease contracts	22,980	33,488
Maturity Period Less than One Year [member]
Disclosure of finance lease agreements obligations [Line Items]
Minimum finance lease payments payable	10,826	15,151
Present value of the obligations for finance lease contracts	9,749	13,514
Maturity Period Greater than One and Less than Five Year [member]
Disclosure of finance lease agreements obligations [Line Items]
Minimum finance lease payments payable	16,813	21,583
Present value of the obligations for finance lease contracts	S/ 13,231	S/ 19,974

XML

Other Comprehensive Income - Summary of Accumulated Other Comprehensive Income Loss (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of analysis of other comprehensive income by item [line items]
Beginning balance	S/ 2,489,931	S/ 2,589,078	S/ 2,489,737
Ending balance	1,876,085	2,489,931	2,589,078
Reserve of cash flow hedges [member]
Disclosure of analysis of other comprehensive income by item [line items]
Beginning balance	484	371	(87)
Credit (charge) for the year	8	160	650
Tax effects	(2)	(47)	(192)
Other comprehensive income of the year	6	113	458
Ending balance	490	484	371
Reserve of exchange differences on translation [member]
Disclosure of analysis of other comprehensive income by item [line items]
Beginning balance	(56,792)	(63,722)	(54,556)
Credit (charge) for the year	(6,892)	(7,875)	(9,166)
Transfer to profit or loss (*)		14,805
Other comprehensive income of the year	(6,892)	6,930	(9,166)
Ending balance	(63,684)	(56,792)	(63,722)
Reserve of gains and losses on remeasuring available-for-sale financial assets [member]
Disclosure of analysis of other comprehensive income by item [line items]
Beginning balance	7,461	7,461	7,461
Ending balance	7,461	7,461	7,461
Reserve of change in value of foreign currency basis spreads [member]
Disclosure of analysis of other comprehensive income by item [line items]
Beginning balance	(9,954)	(1,962)	(8,455)
Credit (charge) for the year		(10,800)	9,222
Tax effects		2,808	(2,729)
Other comprehensive income of the year		(7,992)	6,493
Ending balance	(9,954)	(9,954)	(1,962)
Accumulated other comprehensive income [member]
Disclosure of analysis of other comprehensive income by item [line items]
Beginning balance	(58,801)	(57,852)	(55,637)
Credit (charge) for the year	(6,884)	(18,515)	706
Tax effects	(2)	2,761	(2,921)
Transfer to profit or loss (*)		14,805
Other comprehensive income of the year	(6,886)	(949)	(2,215)
Ending balance	S/ (65,687)	S/ (58,801)	S/ (57,852)

XML

Business Combinations - Additional Information (Detail) S/ in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2019 PEN (S/)	Dec. 31, 2014 PEN (S/)	Dec. 31, 2018 PEN (S/)	Dec. 31, 2017 PEN (S/)	Dec. 31, 2014 USD ($)	Dec. 23, 2014
Disclosure of detailed information about business combination [line items]
Goodwill	S/ 57,367		S/ 93,288	S/ 116,804
Estimated liability	S/ 4,528,379		4,940,465
Morelco S.A.S. [member]
Disclosure of detailed information about business combination [line items]
Percentage of interest in capital stock						70.00%
Business combination consideration transferred		S/ 277,100			$ 93.7
Cash payments made for acquisition		237,500			78.5
Contingent liabilities recognised in business combination		45,700			15.1
Goodwill		S/ 105,800			$ 36.1
Non-controlling interest, ownership interest		30.00%
Price per share description	The price per share in each sale option shall be equal to the base price per share plus an interest charge. The base price per share shall be the result of dividing 5,375 times the EBITDA of the twelve (12) months prior to the date of receipt of the Notification of the option of sale by GyM S.A. minus DFN, between (and) all of the shares at the date of receipt of the Notice of option of sale by GyM S.A.; however, the corresponding base price per share shall not be less than the price per share corresponding to the purchase price [as that term is defined in the share sale Contract). The base price per Minimum action established in this Section 7.3 (c) shall not apply: (a) in a sale option that is triggered by the GyM S.A. share provision to a third party, when the GyM S.A. Stock provision does not result in a sale of the Company, and (b) in an Opt sales ion activated before an Exempt Operation. On the base price per share, remuneration interest will be caused at an annual interest rate composed of two point seventy percent (2.70%) as of (i) February 14, 2018 for option 1; (ii) December 31, 2019 for sale option 2 and (iii) in both cases, up to the effective payment date of the purchase contract price concluded as a result of the exercise of each sale option.
Morelco S.A.S. [member] | Purchased call options [member]
Disclosure of detailed information about business combination [line items]
Period over which shares of non-controlling interest be acquired		10 years
Morelco S.A.S. [member] | Written put options [member]
Disclosure of detailed information about business combination [line items]
Estimated liability	S/ 106,400		S/ 103,700
Initial share holder selling option terms	<div style="font-family: times new roman; font-size: 10pt; margin-top: 6pt; margin-bottom: 0pt; margin-left: 4%;">As of December 31, 2020 and for a term of six (6) months, the initial shareholder may exercise a selling option, only once, for a number of shares held by the Initial shareholder equivalent to <div style="white-space: nowrap; letter-spacing: 0px; top: 0px;;display:inline;">sixty-six</div> point sixty-seven percent (66.67%) of the shares held by the Initial shareholder at the time of exercising the Low sale option this <div style="white-space: nowrap; letter-spacing: 0px; top: 0px;;display:inline;">sub-clause</div> (sale option 1). As of December 31, 2022 and for a term of six (6) months, the Initial shareholder may at any time exercise a sale option, for one time only, for the totality and not less than the totality of the shares held by the Initial shareholder at the time of exercising the sale option under this subclause, notwithstanding the foregoing, if GyM S.A. does not fulfill its obligations subject to the option of sale 1 within the period indicated in paragraph b of this Section 7.3, the term established for the exercise of option 2 is accelerated and may be exercised by the Initial shareholder at any time after the day following expiration of said period by sending a Notification of the option of sale to GyM S.A., so that in such event GyM S.A. will only fulfill its obligations by purchasing one hundred (100%) of the shares held by the previous shareholder.</div> <table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table>

XML

Summary of Significant Accounting - Disclosure Of Discontinued Operations Explanatory Policies (Details) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Statement [line items]
Profit for the year	S/ (43,959)	S/ 36,785	S/ 210,431
Other comprehensive income:
Total comprehensive income for the year	(847,262)	71,709	200,958
Comprehensive income attributable to:
Owners of the Company	(891,607)	(67,548)	143,575
Non-controlling interest	S/ 44,345	139,257	57,383
Audited [member]
Statement [line items]
Profit for the year		57,415	3,562
Other comprehensive income:
Remeasurement of actuarial gains and losses, net of tax		16,589
Cash flow hedge, net of tax		119
Foreign currency translation adjustment, net of tax		5,733
Exchange difference from net investment in a foreign operation, net of tax		(8,147)
Reclassification adjustments on cash flow hedges, net of tax		(2,295)
Other comprehensive income for the year, net of tax		14,294
Total comprehensive income for the year		71,709
Comprehensive income attributable to:
Owners of the Company		(67,548)
Non-controlling interest		139,257
Comprehensive Income Attributable To Owners Of The Company And Noncontrolling Interest		71,709
Comprehensive income attributable to owners of the Company:
Continuing operations		(98,942)
Discontinued operations		31,394
Comprehensive Income Attributable To Continued Operations And Noncontrolling Interest		(67,548)
Reclassification discontinued operations [member]
Statement [line items]
Profit for the year			S/ 52,545
Comprehensive income attributable to owners of the Company:
Continuing operations		(32,342)
Discontinued operations		32,342
Reclassified [member]
Statement [line items]
Profit for the year		57,415
Other comprehensive income:
Remeasurement of actuarial gains and losses, net of tax		16,589
Cash flow hedge, net of tax		119
Foreign currency translation adjustment, net of tax		5,733
Exchange difference from net investment in a foreign operation, net of tax		(8,147)
Reclassification adjustments on cash flow hedges, net of tax		(2,295)
Other comprehensive income for the year, net of tax		14,294
Total comprehensive income for the year		71,709
Comprehensive income attributable to:
Owners of the Company		(67,548)
Non-controlling interest		139,257
Comprehensive Income Attributable To Owners Of The Company And Noncontrolling Interest		71,709
Comprehensive income attributable to owners of the Company:
Continuing operations		(131,284)
Discontinued operations		63,736
Comprehensive Income Attributable To Continued Operations And Noncontrolling Interest		S/ (67,548)

XML

Investments In Associates And Joint Ventures - Summary of Financial Information for Associates (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of financial information of associates [line items]
Assets	S/ 3,070,669	S/ 3,233,254
Liabilities	(2,680,846)	(2,891,614)
Assets	3,333,795	4,197,142	S/ 4,775,724
Liabilities	(1,847,533)	(2,048,851)
Administrative expenses	(213,908)	(278,433)	(322,454)
Loss of the year before tax	(474,726)	133,948	45,112
Income tax expense	(319,957)	(113,318)	(46,305)
Loss of the year	(794,683)	20,630	(1,193)
Total comprehensive income for the year	(847,262)	71,709	S/ 200,958
Gasoducto Sur Peruano S.A. [member]
Disclosure of financial information of associates [line items]
Assets		7,006,473
Liabilities		(5,294,214)
Net assets		1,712,259
Concesionaria Chavimochic S.A.C. [member]
Disclosure of financial information of associates [line items]
Assets	55,586	66,052
Liabilities	(1,521)	(2,183)
Assets	16,007	13,580
Liabilities	0
Net assets	70,072	77,449
Administrative expenses	(11,916)	(8,455)
Loss of the year before tax	(11,916)	(8,455)
Income tax expense	3,600	2,543
Loss of the year	(8,316)	(5,912)
Total comprehensive income for the year	S/ (8,316)	S/ (5,912)

XML

Other Income and Expenses, Net (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Other Income and Expenses, Net

For the years ended December 31, these items include the following:

	2017			2018			2019
Other income:
Profit from Mizuho Agreement (a)		—			—			89,688
Recovery of provisions and accounting impairments		—			—			23,279
Trademarks revaluation		—			—			20,676
Supplier debt forgiveness		—			—			19,026
Sale of fixed assets		93,013			26,007			12,748
Sale of investments		—			13,475			—
Present value of the liability from put option		79			6,122			—
Others		6,466			12,815			14,368
		99,558			58,419			179,785
Other expenditures:
Asset impairment (b)		—			—			296,581
Civil repair to the Peruvian Government (c)		—			73,500			69,150
Legal litigation (class action) (Note 22)		—			—			49,754
Impairment of goodwill and trademarks (Note 17 a)		49,608			—			33,089
Net cost of fixed assets disposal		78,378			36,931			21,061
Others		4,441			9,323			36,904
		132,427			119,754			506,539
		(32,869	)		(61,335	)		(326,754	)

(a) Corresponds to the refinancing agreement linked to the contract signed between GyM Ferrrovias S.A. and Mitzuho Bank Ltd. where the Company acted as an endorsement of the transaction. Under the contract, a bond letter was issued with Mitzuho Bank Ltd. for it to be covered with a financial derivative. The contract further indicated that in the event that the bank refinanced the debt, the Company received 70% of the gains obtained.

(b) Mainly corresponds to a provision for impairment of accounts receivable from GSP for S/276 million (Note 15 a) and the subsidiary Promotora Larco Mar S.A. recognized an impairment on work in progress balances for S/18 million.

(c) The Company increased the provision for civil reparation in S/69 million (Note 22).

XML

Transactions with Non-Controlling Interests (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Contributions of Non-controlling Shareholders

Corresponds to the contributions and returns made by the partners of the subsidiary Viva GyM S.A. for the realization of real estate projects. As of December 31, the balances include:

	2017			2018			2019
Viva GyM S.A.
Contributions received		8,654			3,399			152
Returns of contributions		(45,053	)		(87,856	)		(33,148	)
		(36,399	)		(84,457	)		(32,996	)
Plus (less):
Contributions from other subsidiaries		3,202			15,120			—
Increase (decrease) in equity of non controlling parties		(33,197	)		(69,337	)		(32,996	)

XML

Financial Risk Management - Schedule of Consolidated Statement of Financial Position (Detail) S/ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands	Dec. 31, 2019 PEN (S/)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 COP ($)	Dec. 31, 2019 CLP ($)	Dec. 31, 2018 PEN (S/)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 COP ($)	Dec. 31, 2018 CLP ($)
Disclosure Of Financial Risk Management [line items]
Liabilities	S/ 1,723,108				S/ 2,139,714
Foreign exchange risk [member]
Disclosure Of Financial Risk Management [line items]
Assets	2,859,324	$ 862,021	$ 187,119,204	$ 19,915,617	2,273,132	$ 674,753	$ 163,560,697	$ 48,129,848
Liabilities	S/ 1,751,479	$ 528,031	$ 76,446,723	$ 39,193,917	S/ 2,042,176	$ 604,383	$ 76,978,655	$ 49,728,313

XML

Investments In Associates And Joint Ventures - Schedule of Amounts Recognised in Income Statement (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure Of Investments In Associates And Joint Ventures [abstract]
Associates	S/ (220,993)	S/ (5,308)	S/ (5,566)
Joint ventures	2,219	1,599	6,039
Share of profit loss of associates and joint ventures accounted for using equity method	S/ (218,774)	S/ (3,709)	S/ 473

XML

Investments In Associates And Joint Venture - Summary of Financial Information for Joint Ventures (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of financial information of joint ventures [line items]
Cash and cash equivalents	S/ 948,978	S/ 801,140	S/ 626,180
Total current assets	3,070,669	3,233,254
Other current liabilities	(635,305)	(632,669)
Total current liabilities	(2,680,846)	(2,891,614)
Total non-current assets	3,333,795	4,197,142	4,775,724
Total non-current liabilities	(1,847,533)	(2,048,851)
Revenues	4,085,004	3,899,462	4,014,013
Depreciation and amortization	(202,630)	(189,509)	(179,725)
(Loss)/profit before income tax	(474,726)	133,948	45,112
Income tax expense	(319,957)	(113,318)	(46,305)
Profit from continuing operations after income tax	(794,683)	20,630	(1,193)
Other comprehensive income	(8,620)	14,294	(8,280)
Total comprehensive income	(847,262)	71,709	S/ 200,958
Logistica Quimicos del Sur S.A.C. [member]
Disclosure of financial information of joint ventures [line items]
Cash and cash equivalents	2,131	1,520
Other current assets	2,416	1,549
Total current assets	4,547	3,069
Other current liabilities	(4,381)	(3,513)
Total current liabilities	(4,381)	(3,513)
Total non-current assets	37,620	37,349
Total non-current liabilities	(21,773)	(22,445)
Net assets	16,013	14,460
Revenues	12,622	11,399
Depreciation and amortization	(2,505)	(2,313)
Interest expense	(644)	(668)
(Loss)/profit before income tax	6,500	4,698
Income tax expense	(1,913)	(1,482)
Profit from continuing operations after income tax	4,587	3,216
Other comprehensive income	0	0
Total comprehensive income	S/ 4,587	S/ 3,216

XML

Financial Risk Management - Schedule of Undiscounted Cash Flows of Financial Liabilities (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure Of Undiscounted Cash Flows Financial Liabilities [line items]
Lease liability for right-of-use asset	S/ 80,216
Bonds	924,042	S/ 937,042
Accounts payables to related parties	38,916	55,941
Other accounts payables (except non-financial liabilities)	70,592	55,865
Liquidity risk [member]
Disclosure Of Undiscounted Cash Flows Financial Liabilities [line items]
Other financial liabilities (except for finance leases)	803,491	1,260,011
Finance leases	27,639	36,734
Lease liability for right-of-use asset	102,524
Bonds	1,709,627	1,794,438
Trade accounts payables (except non-financial liabilities)	966,620	980,723
Accounts payables to related parties	61,499	77,790
Other accounts payables (except non-financial liabilities)	397,511	473,210
Other non-financial liabilities	52	61
Derivative financial liabilities undiscounted cash flows	4,068,963	4,622,967
Liquidity risk [member] | Up to 1 year [member]
Disclosure Of Undiscounted Cash Flows Financial Liabilities [line items]
Other financial liabilities (except for finance leases)	479,000	816,122
Finance leases	10,826	15,151
Lease liability for right-of-use asset	24,966
Bonds	115,690	111,080
Trade accounts payables (except non-financial liabilities)	966,620	980,723
Accounts payables to related parties	38,916	55,941
Other accounts payables (except non-financial liabilities)	200,098	116,806
Derivative financial liabilities undiscounted cash flows	1,836,116	2,095,823
Liquidity risk [member] | From 1 to 2 years [member]
Disclosure Of Undiscounted Cash Flows Financial Liabilities [line items]
Other financial liabilities (except for finance leases)	147,473	273,079
Finance leases	3,467	7,489
Lease liability for right-of-use asset	38,788
Bonds	157,516	153,287
Accounts payables to related parties	21,747	21,849
Other accounts payables (except non-financial liabilities)	2,505	17,777
Other non-financial liabilities	52	61
Derivative financial liabilities undiscounted cash flows	371,548	473,542
Liquidity risk [member] | Within 2 to 5 years [member]
Disclosure Of Undiscounted Cash Flows Financial Liabilities [line items]
Other financial liabilities (except for finance leases)	177,018	129,233
Finance leases	13,346	14,094
Lease liability for right-of-use asset	31,167
Bonds	358,461	355,667
Other accounts payables (except non-financial liabilities)	194,908	338,627
Derivative financial liabilities undiscounted cash flows	774,900	837,621
Liquidity risk [member] | Over 5 years [member]
Disclosure Of Undiscounted Cash Flows Financial Liabilities [line items]
Other financial liabilities (except for finance leases)		41,577
Lease liability for right-of-use asset	7,603
Bonds	1,077,960	1,174,404
Accounts payables to related parties	836
Derivative financial liabilities undiscounted cash flows	S/ 1,086,399	S/ 1,215,981

XML

Summary of Significant Accounting Policies - Summary of Estimated Useful Life of Property, Plant and Equipment (Detail)	12 Months Ended
	Dec. 31, 2019
Bottom of range [member] | Buildings [member]
Disclosure Of Property Plant And Equipment Estimated Useful Life [line items]
Property, plant and equipment, estimated useful life	3 years
Bottom of range [member] | Machinery [member]
Disclosure Of Property Plant And Equipment Estimated Useful Life [line items]
Property, plant and equipment, estimated useful life	4 years
Bottom of range [member] | Vehicles [member]
Disclosure Of Property Plant And Equipment Estimated Useful Life [line items]
Property, plant and equipment, estimated useful life	2 years
Bottom of range [member] | Furniture and fixture [member]
Disclosure Of Property Plant And Equipment Estimated Useful Life [line items]
Property, plant and equipment, estimated useful life	2 years
Bottom of range [member] | Other equipment [member]
Disclosure Of Property Plant And Equipment Estimated Useful Life [line items]
Property, plant and equipment, estimated useful life	2 years
Top of range [member] | Buildings [member]
Disclosure Of Property Plant And Equipment Estimated Useful Life [line items]
Property, plant and equipment, estimated useful life	33 years
Top of range [member] | Machinery [member]
Disclosure Of Property Plant And Equipment Estimated Useful Life [line items]
Property, plant and equipment, estimated useful life	10 years
Top of range [member] | Vehicles [member]
Disclosure Of Property Plant And Equipment Estimated Useful Life [line items]
Property, plant and equipment, estimated useful life	10 years
Top of range [member] | Furniture and fixture [member]
Disclosure Of Property Plant And Equipment Estimated Useful Life [line items]
Property, plant and equipment, estimated useful life	10 years
Top of range [member] | Other equipment [member]
Disclosure Of Property Plant And Equipment Estimated Useful Life [line items]
Property, plant and equipment, estimated useful life	10 years

XML

Discontinued Operations - Additional Information (Detail) S/ in Thousands, $ in Thousands							12 Months Ended
	Dec. 04, 2018 PEN (S/)	Dec. 04, 2018 USD ($)	Mar. 28, 2018 PEN (S/)	Mar. 28, 2018 USD ($)	Jun. 06, 2017 PEN (S/)	Jun. 06, 2017 USD ($)	Dec. 31, 2018 PEN (S/)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 PEN (S/)	Dec. 31, 2017 USD ($)
GMD SA [member]
Disclosure Of Discontinued Operation [line items]
Percentage of interest in property					89.19%	89.19%
Agreed selling price					S/ 269,900	$ 84,700
Gain loss on sale of subsidiaries									S/ 218,300	$ 64,600
CAM Chile S.A. [member]
Disclosure Of Discontinued Operation [line items]
Agreed selling price	S/ 51,700	$ 15,780
CAM Servicios del Peru S.A. [member]
Disclosure Of Discontinued Operation [line items]
Percentage of interest in property	73.16%	73.16%
Agreed selling price	S/ 10,400	$ 3,000
Stracon GyM member]
Disclosure Of Discontinued Operation [line items]
Percentage of interest in property			87.59%	87.59%
Agreed selling price			S/ 248,800	$ 76,800
Gain loss on sale of subsidiaries | $								$ 41,900
CAM Chile SA and CAM Servicios Del Peru SA [member]
Disclosure Of Discontinued Operation [line items]
Gain loss on sale of subsidiaries | S/							S/ 31,700
Red eagle mining corporation [member]
Disclosure Of Discontinued Operation [line items]
Percentage of interest in property									6.18%	6.18%
Agreed selling price									S/ 16,240	$ 3,990

XML

Trade Accounts Payable - Summary of provision of contract costs (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure Of Trade Accounts Payable [Line Items]
Provision of contract costs	S/ 746,408	S/ 378,670
Infrastructure [member]
Disclosure Of Trade Accounts Payable [Line Items]
Provision of contract costs	52,658	12,209
Infrastructure [member] | Linea 1 - Metro de Lima [member]
Disclosure Of Trade Accounts Payable [Line Items]
Provision of contract costs	13,383	11,189
Infrastructure [member] | Oil Services [member]
Disclosure Of Trade Accounts Payable [Line Items]
Provision of contract costs	20,512	0
Infrastructure [member] | Operation and maintenance - Roads [member]
Disclosure Of Trade Accounts Payable [Line Items]
Provision of contract costs	18,763	1,020
Engineering and Construction [member]
Disclosure Of Trade Accounts Payable [Line Items]
Provision of contract costs	679,091	340,187
Engineering and Construction [member] | Talara Refinery [member]
Disclosure Of Trade Accounts Payable [Line Items]
Provision of contract costs	418,540	115,870
Engineering and Construction [member] | Works and Consortiums [member]
Disclosure Of Trade Accounts Payable [Line Items]
Provision of contract costs	68,239	105,681
Engineering and Construction [member] | Engineering and Construction Works VYV - DSD [member]
Disclosure Of Trade Accounts Payable [Line Items]
Provision of contract costs	68,140	51,412
Engineering and Construction [member] | Engineering and Construction Works - Morelco SAS [member]
Disclosure Of Trade Accounts Payable [Line Items]
Provision of contract costs	34,804	27,570
Engineering and Construction [member] | North Concentrator Plant - Quellaveco [member]
Disclosure Of Trade Accounts Payable [Line Items]
Provision of contract costs	24,185	10,030
Engineering and Construction [member] | Mina Project Of Gold Fields La Cima SA [Member]
Disclosure Of Trade Accounts Payable [Line Items]
Provision of contract costs	15,050	8,520
Engineering and Construction [member] | Civil Works, Assembly and Electromechanics - Acero Arequipa [member]
Disclosure Of Trade Accounts Payable [Line Items]
Provision of contract costs	17,382	4,932
Engineering and Construction [member] | Civil Works, Assembly and Electromechanics - Toquepala [member]
Disclosure Of Trade Accounts Payable [Line Items]
Provision of contract costs	5,055	5,283
Engineering and Construction [member] | Generating Plant Machu Picchu [member]
Disclosure Of Trade Accounts Payable [Line Items]
Provision of contract costs	4,633	2,376
Engineering and Construction [member] | Others [member]
Disclosure Of Trade Accounts Payable [Line Items]
Provision of contract costs	23,063	8,513
Real Estate [member]
Disclosure Of Trade Accounts Payable [Line Items]
Provision of contract costs	13,573	12,808
Parent company operation [member]
Disclosure Of Trade Accounts Payable [Line Items]
Provision of contract costs	S/ 1,086	S/ 13,466

XML

Deferred Income Tax - Summary of Gross Movement of Deferred Income Tax Item (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reconciliation of changes in deferred tax liability (asset) [abstract]
Beginning balance	S/ 350,089	S/ 364,225	S/ 353,839
Debit (credit) to income statement (Note 29)	(206,273)	25,118	42,599
Adjustment for changes in rates of income tax	(622)	(1,524)	1,951
Sale of a subsidiary		(40,460)	(12,160)
IFRIC 23 adoption	(986)
Debit (credit) to equity	(3)	(95)	(16,804)
Other movements	(14,020)	2,825	(5,200)
Ending balance	S/ 128,185	S/ 350,089	S/ 364,225

XML

Events After the Date of the Statement of Financial Position

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Events After the Date of the Statement of Financial Position

37 EVENTS AFTER THE DATE OF THE STATEMENT OF FINANCIAL POSITION

1. On January 9, 2020, the Company communicated that the creditors committee of Adexus S.A. approved with the favorable vote of more than 80% of the pledge creditors and 85% of the unsecured creditors, respectively, the judicial reorganization agreement proposed by Adexus S.A. in the framework of the reorganization procedure. According to the terms of the judicial reorganization agreement, Adexus S.A. will restructure and pay the total of its reorganized liabilities within a maximum period of six years, according to the new agreed conditions, being authorized to continue with its commercial activities normally. As a result of the financial protection provided by the Chilean law and with the support of its creditors, Adexus S.A. has achieved the restructuring of its liabilities while continuing to serve all its customers.

2. On February 3, 2020, the General Shareholders Meeting of the Company approved the decision to enter into the Preliminary Agreement and the withdrawal and dismissal of the Request for Arbitration filed by the Company pursuant to the Preliminary Agreement. In addition, the ratification of the Act of Mutual Understanding for the Completion of Plea Agreement Procedure with the Peruvian Third Bureau of the Supraprovincial Corporate Prosecutor’s Office Specialized in Crimes of Corruption of Officials – Special Team and the Ad Hoc Peruvian National State Counsel.

3. The recent outbreak of the Novel Coronavirus 2019 (COVID-19) pandemic, which has been declared by the World Health Organization to be a “public health emergency of international concern,” has spread across the world since the end of 2019. Countries around the world—including Peru as well as Chile and Colombia—have adopted extraordinary measures to contain the spread of COVID-19, including imposing travel restrictions, requiring closures of non-essential businesses, establishing restrictions on public gatherings, instructing residents to practice social distancing, issuing stay-at-home orders, implementing quarantines and similar actions. In response to the sudden decline in economic activity, the governments of Perú, Chile and Colombia have announced large stimulus programs to assist families and businesses.

As a result, the Group’s results of operations, financial positions and cash flows have been adversely affected as of the date of this report with potential impacts on subsequent periods, including but not limited to the significant decline in revenue and significant operating cash flow. The impacts may also include additional allowance for doubtful accounts and impairment to the Group’s long-term assets. Because of the significant uncertainties surrounding the COVID-19, the exact financial impact is unpredictable and will depend on future developments, including new information which may emerge concerning the duration of the state of emergency which has been extended until June 30th for Perú, September 18th for Chile and until August 31st for Colombia, the actions taken by authorities and other entities to contain the COVID-19 outbreak, among others, all of which are beyond the Group’s control. The Group will continue to closely monitor the impacts of COVID-19 through the course of the year 2020.

Since mid-March 2020, substantially all of our engineering and construction and real estate projects were mandatorily shut down, however, as part of the Government plan to activate some industries according to progressive stages, most of our projects are in the process of re-activating operations gradually. Our infrastructure operations, were declared essential businesses, therefore have continue operating; however, certain of our infrastructure businesses have been adversely affected, in particular, by the sharp decline in traffic volumes and oil and gas prices (also due to the dispute in March among OPEC member countries).

In response to this situation, the Group has implemented a plan that includes several measures to reduce expenses and preserve cash in response to the ongoing COVID-19 pandemic, including the following: (i) developing a 12-week cash plan, project-by-project, to ensure that the Company will continue to meet its critical obligations during that period, which plan is monitored and updated weekly; (ii) preparing a cash plan for the remainder of the 2020 fiscal year, to identify in advance key liquidity issues that may arise; (iii) identifying and renegotiating certain of the company’s obligations with respect to its suppliers, banks and other third parties; (iv) identifying and reducing non-essential general expenses across the group; (v) reducing headcount, and temporarily reducing salaries of senior management, across the company’s three segments; and (vi) reducing capital expenditures across the company’s subsidiaries. In addition, the Group is evaluating the selling of minor assets to finance any cash flow deficit during the year. This plan was approved by the board of directors on April and May 2020. Therefore, the accompanying financial statements have been prepared assuming that the group and subsidiaries will continue as a going concern.

The consolidated financial statements have been prepared based on the existing conditions as of December 31, 2019, and considering those events that occurred after that date, and no adjustments needed to be recorded to the consolidated financial statements as of December 31, 2019 due to the COVID-19 impacts.

XML

Other Provisions - Summary Gross Movement of Other Provisions (Detail) S/ in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2019 PEN (S/)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 PEN (S/)	Dec. 31, 2017 PEN (S/)
Disclosure of other provisions [line items]
Beginning balance	S/ 109,608		S/ 47,417	S/ 41,073
Additions	228,719		78,947	9,510
Reversals of provisions	(7,471)		(6,218)	(1,456)
Deconsolidation of subsidiaries			(2,340)
Reclasification liabilities classified as held for sale			(1,093)
Payments	(2,178)		(6,615)	(1,680)
Translation adjustments	(243)		(490)	(30)
Ending balance	328,435	$ 5	109,608	47,417
Legal proceedings provision [member]
Disclosure of other provisions [line items]
Beginning balance	84,728		23,364	15,732
Additions	197,721		75,369	9,510
Reversals of provisions	(3,122)		(4,875)	(235)
Deconsolidation of subsidiaries			(2,340)
Payments	(914)		(6,615)	(1,680)
Translation adjustments	(94)		(175)	37
Ending balance	278,319		84,728	23,364
Contingent liabilities [member]
Disclosure of other provisions [line items]
Beginning balance	4,498		7,249	8,125
Reversals of provisions	(4,349)		(1,343)	(809)
Reclasification liabilities classified as held for sale			(1,093)
Translation adjustments	(149)		(315)	(67)
Ending balance	0		4,498	7,249
Provision for decommissioning, restoration and rehabilitation costs [member]
Disclosure of other provisions [line items]
Beginning balance	20,382		16,804	17,216
Additions	30,998		3,578
Reversals of provisions				(412)
Payments	(1,264)
Ending balance	S/ 50,116		S/ 20,382	S/ 16,804

XML

Financial Risk Management (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Schedule of Consolidated Statement of Financial Position

At December 31, 2018 and 2019, the consolidated statement of financial position includes the following:

	2018				2019
	S/(000)		USD(000)		S/(000)		USD(000)
Assets		2,273,132		674,753		2,859,324		862,021
Liabilities		2,042,176		604,383		1,751,479		528,031

Schedule of Foreign Currency Exchange Gains and Losses Exposure against US Dollar

The Group’s exchange gains and losses for the Peruvian Sol, the Chilean and Colombian Pesos exposure against the U.S. dollar was:

	2017			2018			2019
Gain		329,751			382,104			390,008
Loss		(323,927	)		(405,380	)		(422,578	)

Schedule of Assets and Liabilities Equivalent to Functional Currency

The consolidated statement of changes in equity comprises a foreign currency translation adjustment originated by its subsidiaries. The consolidated statement of financial position includes assets and liabilities in functional currency equivalent to (in thousands):

	2018				2019
	Assets		Liabilities		Assets		Liabilities
Chilean Pesos		48,129,848		49,728,313		19,915,617		39,193,917
Colombian Pesos		163,560,697		76,978,655		187,119,204		76,446,723

Schedule of Undiscounted Cash Flows of Financial Liabilities

The table below analyzes the Group’s financial liabilities into relevant maturity groupings based on the remaining period from the date of the consolidated statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

	Less than 1 year		1-2 years		2-5 years		More than 5 years		Total
At December 31, 2018
Other financial liabilities (except for finance leases)		816,122		273,079		129,233		41,577		1,260,011
Finance leases		15,151		7,489		14,094		—		36,734
Bonds		111,080		153,287		355,667		1,174,404		1,794,438
Trade accounts payables (except non-financial liabilities)		980,723		—		—		—		980,723
Accounts payables to related parties		55,941		21,849		—		—		77,790
Other accounts payables (except non-financial liabilities)		116,806		17,777		338,627		—		473,210
Other non-financial liabilities		—		61		—		—		61
		2,095,823		473,542		837,621		1,215,981		4,622,967

	Less than 1 year		1-2 years		2-5 years		More than 5 years		Total
At December 31, 2019
Other financial liabilities (except for finance leases and lease liability for right-of-use asset)		479,000		147,473		177,018		—		803,491
Finance leases		10,826		3,467		13,346		—		27,639
Lease liability for right-of-use asset		24,966		38,788		31,167		7,603		102,524
Bonds		115,690		157,516		358,461		1,077,960		1,709,627
Trade accounts payables (except non-financial liabilities)		966,620		—		—		—		966,620
Accounts payables to related parties		38,916		21,747		—		836		61,499
Other accounts payables (except non-financial liabilities)		200,098		2,505		194,908		—		397,511
Other non-financial liabilities		—		52		—		—		52
		1,836,116		371,548		774,900		1,086,399		4,068,963

Schedule of Information About Gearing Ratio

As of December 31, 2018, and 2019, the gearing ratio is presented below indicating the Group’s strategy to keep it in a range from 0.10 to 0.70.

	2018			2019
Total financial liabilities and bonds		2,139,714			1,723,108
Less: Cash and cash equivalents		(801,140	)		(948,978	)
Net debt		1,338,574			774,130
Total equity		2,489,931			1,876,085
Total capital		3,828,505			2,650,215
Gearing ratio		0.35			0.29

Schedule of Assets and Liabilities Measured at Fair Value

The table below shows the Group’s assets and liabilities measured at fair value on December 31, 2018, and 2019:

	Level 2
At December 31, 2018
Financial liabilities
Derivatives used for hedging		61
At December 31, 2019
Financial liabilities
Derivatives used for hedging		52

4.4 COVID-19 Pandemic

As a result of the outbreak of Coronavirus 2019 (COVID-19), the Group’s results of operations, financial positions and cash flows have been adversely affected as of the date of this report with potential impacts on subsequent periods, including but not limited to the significant decline in revenue and significant operating cash flow. The impacts may also include additional allowance for doubtful accounts and impairment to the Group’s long-term assets. Because of the significant uncertainties surrounding the COVID-19, the exact financial impact is unpredictable and will depend on future developments, including new information which may emerge concerning the duration of the lockdown which has been extended until June 30th for Perú, until September 18th for Chile and until August 31st for Colombia, the actions taken by authorities and other entities to contain the COVID-19 outbreak, among others, all of which are beyond the Group’s control. The Group will continue to closely monitor the impacts of COVID-19 through the course of the year 2020.

From mid-March until the end of May 2020, substantially all of our engineering and construction and real estate projects in Perú were mandatorily shut down, however, as part of the Government plan to activate some industries by stages, most of our projects of our engineering and construction and real estate segments are gradually resuming. In Colombia the projects under execution were declare as essential projects therefore they continued operating since the beginning of the lockdown. Finally our projects in Chile were shut down but only for few days, after which they resume operations. Our infrastructure operations, were declared essential businesses, therefore have continue operating, however, certain of our infrastructure businesses have been adversely affected, in particular, by the sharp decline in traffic volumes and oil and gas prices (also due to the dispute in March among OPEC member countries).

On the liquidity side, the Company has implemented a plan that includes several measures to reduce expenses and preserve cash in response to the ongoing COVID-19 pandemic, including the following: (i) developing a 12-week cash plan, project-by-project, to ensure that the Company will continue to meet its critical obligations during that period, which plan is monitored and updated weekly; (ii) preparing a cash plan for the remainder of the 2020 fiscal year, to identify in advance key liquidity issues that may arise; (iii) identifying and renegotiating certain of the company’s obligations with respect to its suppliers, banks and other third parties; (iv) identifying and reducing non-essential general expenses across the group; (v) reducing headcount, and temporarily reducing salaries of senior management, across the company’s three segments; and (vi) reducing capital expenditures across the company’s subsidiaries. In addition the Group is evaluating the selling of minor assets that will help finance any deficit during the year.

XML

Bonds - Additional Information (Detail) S/ in Millions, $ in Millions			1 Months Ended	12 Months Ended
	Dec. 31, 2018 USD ($)	Aug. 23, 2017 USD ($)	Feb. 28, 2015 PEN (S/)	Dec. 31, 2019 PEN (S/)	Dec. 31, 2018 PEN (S/)	Dec. 31, 2016 PEN (S/)
Disclosure of detailed information about borrowings [line items]
Fair value of bonds				S/ 1,014.0	S/ 1,037.0
Mizuho Bank Ltd And Sumitomo Mitsui Banking Corporation [member]
Disclosure of detailed information about borrowings [line items]
Working capital loan | $		$ 80
Working capital loan disbursed | $	$ 62
Top of range [member]
Disclosure of detailed information about borrowings [line items]
Interest rate				12.00%	12.00%
Top of range [member] | Concession Agreement [member]
Disclosure of detailed information about borrowings [line items]
Sale and purchase agreement | $		$ 316
Top of range [member] | Level 2 of fair value hierarchy [member]
Disclosure of detailed information about borrowings [line items]
Interest rate				11.00%	8.90%
Discounted cash flows rates				7.59%	5.45%
Bottom of range [member]
Disclosure of detailed information about borrowings [line items]
Interest rate				7.00%	7.00%
Bottom of range [member] | Level 2 of fair value hierarchy [member]
Disclosure of detailed information about borrowings [line items]
Interest rate				2.90%	2.40%
Discounted cash flows rates				4.32%	4.09%
GyM Ferrovias S.A. [member]
Disclosure of detailed information about borrowings [line items]
Issue of corporate bonds			S/ 629.0
Maturity period of bonds			November 2039
Interest rate			4.75%
Bonds amortized				S/ 79.0	S/ 67.7
Accrued interest and VAC adjustments payable				S/ 86.8	S/ 72.0
Norvial S.A. [member]
Disclosure of detailed information about borrowings [line items]
Issue of corporate bonds						S/ 365.0

XML

Workers' Profit Sharing (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Worker's Profit Sharing

The distribution of the workers’ profit sharing in the income statement for the years ended December 31 is shown below:

	2017		2018		2019
Cost of sales of goods and services		2,215		5,274		4,661
Administrative expenses		7,562		2,588		1,679
		9,777		7,862		6,340

XML

Consolidated Statement of Cash Flows S/ in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2019 PEN (S/)	Dec. 31, 2018 PEN (S/)	Dec. 31, 2017 PEN (S/)
OPERATING ACTIVITIES
Profit (loss) before income tax	S/ (535,271)	S/ 170,202	S/ 255,543
Adjustments to profit not affecting cash flows from operating activities:
Depreciation	97,352	125,419	199,794
Amortization	105,278	112,072	86,557
Impairment of inventories	4,503		40,908
Impairment of accounts receivable and other accounts receivable	290,491	65,076	19,109
Reversal of impairment of inventories	(4,752)	(26,993)
Debt condonation	(18,186)
Impairment of property, plant and equipment	20,018	5,664	14,680
Impairment of intangible assets	45,821		49,609
Reversal of impairment of accounts receivable	(19,448)
Reversal of impairment of intangible assets	(20,676)
Indemnification		686	3,220
Profit on fair value of financial asset at fair value through profit or loss			(34)
Change in the fair value of the liability for put option	4,697	(6,122)	(1,400)
Other provisions	186,894	75,369	9,510
Financial expense, net	152,970	177,649	138,016
Impairment of investments	384
Share of the profit and loss of associates and joint ventures accounted for using the equity method	218,774	3,709	(1,327)
Reversal of provisions	(7,471)	(6,218)	(1,044)
Disposal of assets	833	16,327	5,438
Disposal of investments			106
Loss (profit) on sale of property, plant and equipment	(11,892)	7,105	(26,883)
Loss on sale of non-current asset held for sale			45
Loss on sale of available-for-sale financial assets		1,529	(25,768)
Profit on sale of investments in subsidiaries		(73,642)	(244,313)
Loss on remeasurement of accounts receivable	45,363	25,110	15,807
Net variations in assets and liabilities:
Trade accounts receivable and unbilled work in progress	457,709	(236,011)	(213,126)
Other accounts receivable	148,833	190,354	33,196
Other accounts receivable from related parties	(11,178)	24,609	(245,688)
Inventories	(34,575)	200,575	279,867
Pre-paid expenses and other assets	4,964	18,309	(6,494)
Trade accounts payable	58,973	10,917	463,401
Other accounts payable	(282,771)	(311,848)	49,319
Other accounts payable to related parties	(24,461)	92,613	(66,819)
Provisions	(2,178)	(6,615)	(1,680)
Interest payment	(157,475)	(188,704)	(173,662)
Payments for purchases of intangibles - Concessions	(25,917)	(10,305)	(20,178)
Payment of income tax	(94,669)	(177,563)	(144,545)
Net cash provided by operating activities	592,937	279,273	491,164
INVESTING ACTIVITIES
Sale of investment		222,971	391,786
Sale of property, plant and equipment	18,607	31,852	127,221
Sale of financial asset at fair value through profit or loss			98
Sale of non-current assets held for sale, net		16,244	43,367
Interest received	6,552	36,508	6,992
Dividends received	1,517	1,823	3,758
Payment for purchase of investments properties	(88)	(209)	(1,183)
Payments for intangible purchase	(80,709)	(86,799)	(97,112)
Payments for purchase and contributions on investment in associate and joint ventures		(3,770)	(2,116)
Payments for property, plant and equipment purchase	(76,707)	(80,765)	(123,941)
Net cash provided by (applied to) investing activities	(130,828)	137,855	348,870
FINANCING ACTIVITIES
Loans received	581,637	1,018,744	1,415,113
Amortization of loans received	(1,074,259)	(1,265,920)	(2,044,256)
Amortization of bonds issued	(31,335)	(28,914)	(39,151)
Payment for transaction costs for debt	(4,770)		(31,286)
Dividends paid to non-controlling interest	(12,762)	(102,772)	(43,942)
Cash received (return of contributions) from non-controlling shareholders	(32,996)	(59,053)	(33,197)
Capital increase	280,636	137,603
Acquisition or sale of interest in a subsidiary of non-controlling shareholders		389	(942)
Net cash applied to financing activities	(293,849)	(299,923)	(777,661)
Net increase in cash	168,260	117,205	62,373
Exchange difference	(20,303)	57,756	(34,867)
Cash and cash equivalents at the beginning of the year	801,021	626,060	598,554
Cash and cash equivalents at the end of the year	948,978	801,021	626,060
NON-CASH TRANSACTIONS:
Interest debt capitalization	7,229	3,361	26,015
Acquisition of assets through finance leases	3,851	2,365	48,507
Accounts payable to the non-controlling interest for purchase of investments		14,022
Return of contribution in inventories		25,389
Dividends declared to non-controlling interest			15,735
Acquisition of right-of-use assets	S/ 101,745
Deconsolidation from non-controlling interest		S/ 54,069	S/ 7,801

XML

Interests in Other Entities - Summary of Group's Subsidiaries Non-controlling Interests (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure of Subsidiaries noncontrolling interests [line items]
Non controlling interests	S/ 398,275	S/ 401,571
Viva GyM S.A. and subsidiaries [member]
Disclosure of Subsidiaries noncontrolling interests [line items]
Non controlling interests	168,839	168,612
GyM S.A. and subsidiaries [member]
Disclosure of Subsidiaries noncontrolling interests [line items]
Non controlling interests	61,569	67,639
Norvial S.A. [member]
Disclosure of Subsidiaries noncontrolling interests [line items]
Non controlling interests	63,031	65,918
GMP S.A. [member]
Disclosure of Subsidiaries noncontrolling interests [line items]
Non controlling interests	24,413	23,424
GyM Ferrovias S.A. [member]
Disclosure of Subsidiaries noncontrolling interests [line items]
Non controlling interests	77,564	55,986
Promotora Larcomar S.A. [member]
Disclosure of Subsidiaries noncontrolling interests [line items]
Non controlling interests	3,058	13,121
Others [member]
Disclosure of Subsidiaries noncontrolling interests [line items]
Non controlling interests	S/ (199)	S/ 6,871

XML

Intangible Assets - Additional Information (Detail) S/ in Thousands, $ in Millions, $ in Millions		12 Months Ended
	Dec. 10, 2014 USD ($)	Dec. 31, 2019 PEN (S/) Wells	Dec. 31, 2019 CLP ($) Wells	Dec. 31, 2018 PEN (S/)	Dec. 31, 2017 PEN (S/)	Dec. 31, 2017 USD ($)	Aug. 31, 2016 PEN (S/)	Dec. 31, 2014 PEN (S/)	Aug. 31, 2013 PEN (S/)
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Period of operating economic activities of each CGU		5 years	5 years
Costs capitalized		S/ 108,000		S/ 68,000	S/ 99,000
Dismantling wells provision		36,000		S/ 3,000
Impairment loss reversal		S/ 20,676	$ 4,782
GMP S.A. [member] | Talara, Piura [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Right for exploiting oil blocks in years	30 years
Total estimated investment | $	$ 400.0
Stracon GyM S.A. [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Percentage of ownership disposed in subsidiary					87.59%	87.59%
Proceeds from ownership interest disposed					S/ 248,800	$ 76.8
Amortisation expense of intangible assets					41,900
Vial y Vives - DSD [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Impairment					29,500
Bottom of range [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Borrowings interest rate		7.00%		7.00%
Top of range [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Borrowings interest rate		12.00%		12.00%
Trademark [member] | Vial and Vives S.A.C. [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Trademarks acquired									S/ 75,400
Trademark [member] | Morelco S.A.S. [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Impairment impact in goodwill		S/ 33,000			S/ 20,100
Trademarks acquired								S/ 33,330
Trademark [member] | Adexus S.A. [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Impairment impact in goodwill		S/ 900
Trademarks acquired							S/ 9,100
Oil lots three [member] | GMP S.A. [member] | Talara, Piura [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Number of wells | Wells		230	230
Oil lots four [member] | GMP S.A. [member] | Talara, Piura [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Number of wells | Wells		330	330
Blocks I and V [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Determined useful lives of wells		5 years	5 years
Blocks III and IV [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Determined useful lives of wells		5 years	5 years
Concession rights [member] | Bottom of range [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Borrowings interest rate		7.14%
Concession rights [member] | Top of range [member]
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Borrowings interest rate		8.72%

XML

Consolidated Statement of Financial Position - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	S/ 948,978	S/ 801,140
Trade accounts receivables, net	821,737	1,007,828
Work in progress, net	49,457	28,538
Accounts receivable from related parties	36,658	34,903
Other accounts receivable	444,500	588,451
Inventories, net	552,573	514,047
Prepaid expenses	11,348	10,549
Current assets before non-current assets classified as held for sale	2,865,251	2,985,456
Non-current assets as held for sale	205,418	247,798
Total current assets	3,070,669	3,233,254
Non-current assets
Trade accounts receivable, net	753,202	1,020,067
Work in progress, net	23,117	32,212
Accounts receivable from related parties	546,941	778,226
Prepaid expenses	27,934	33,697
Other accounts receivable	300,323	302,957
Investments in associates and joint ventures	37,035	257,765
Investment property	28,326	29,133
Property, plant and equipment, net	443,870	470,554
Intangible assets, net	853,315	847,095
Right-of-use assets, net	78,813
Deferred income tax asset	240,919	425,436
Total non-current assets	3,333,795	4,197,142
Total assets	6,404,464	7,430,396
Current liabilities
Borrowings	454,260	826,474
Bonds	44,737	39,167
Trade accounts payable	1,136,121	1,079,531
Accounts payable to related parties	38,916	55,941
Current income tax	47,999	25,807
Other accounts payable	635,305	632,669
Provisions	113,483	6,197
Total current liabilities	2,470,821	2,665,786
Non-current liabilities as held for sale	210,025	225,828
Total current liabilities	2,680,846	2,891,614
Non-current liabilities
Borrowings	344,806	376,198
Bonds	879,305	897,875
Other accounts payable	273,101	574,110
Accounts payable to related parties	22,583	21,849
Provisions	214,952	103,411
Derivative financial instruments	52	61
Deferred income tax liability	112,734	75,347
Total non-current liabilities	1,847,533	2,048,851
Total liabilities	4,528,379	4,940,465
Equity
Capital	871,918	729,434
Legal reserve	132,011	132,011
Voluntary reserve	29,974	29,974
Share Premium	1,132,179	992,144
Other reserves	(177,506)	(170,620)
Retained earnings	(510,766)	375,417
Equity attributable to controlling interest in the Company	1,477,810	2,088,360
Non-controlling interest	398,275	401,571
Total equity	1,876,085	2,489,931
Total liabilities and equity	S/ 6,404,464	S/ 7,430,396

XML

Property, Plant And Equipment, Net And Right-Of-Use Assets - Summary of Movement in Property, Plant and Equipment Accounts and Its Related Accumulated Depreciation (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	S/ 470,554	S/ 865,735	S/ 1,113,599
Additions	80,558	83,186	172,448
Transfer to investment property	(1,460)
Deconsolidation, net		(292,156)	(83,441)
Transfers to intangibles (Note 17)			(169)
Deduction for sale of assets	(35,425)	(95,981)	(308,103)
Disposals, net	(1,637)	(14,619)
Depreciation charge	(72,038)	(123,100)	(197,484)
Impairment loss	(20,018)	(5,664)	(14,680)
Depreciation for sale deductions	28,710	57,024	207,765
Translations adjustments	(5,374)	(3,871)	1,255
Net carrying amount	443,870	470,554	865,735
Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	1,116,350	1,845,331	2,154,316
Disposals, net			(25,455)
Net carrying amount	1,144,220	1,116,350	1,845,331
Accumulated depreciation and amortisation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	(645,796)	(979,596)	(1,040,717)
Net carrying amount	(700,350)	(645,796)	(979,596)
Land [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	20,209	23,678	32,614
Additions	290		157
Transfer to investment property	(273)
Deconsolidation, net		(3,183)	(3,713)
Deduction for sale of assets			(5,616)
Translations adjustments	(525)	(286)	236
Net carrying amount	19,701	20,209	23,678
Land [member] | Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	20,209	23,678	32,614
Net carrying amount	19,974	20,209	23,678
Land [member] | Accumulated depreciation and amortisation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	(273)
Buildings [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	86,382	112,961	195,096
Additions	396	13,216	2,724
Transfer to investment property	(1,187)
Deconsolidation, net		(33,989)	(26,109)
Reclassifications	1,544	17,129	1,969
Deduction for sale of assets	(78)	(3,527)	(51,736)
Disposals, net		(9,723)
Depreciation charge	(5,992)	(14,257)	(12,469)
Depreciation for sale deductions	78	1,189	3,579
Translations adjustments	(360)	3,383	152
Net carrying amount	80,783	86,382	112,961
Buildings [member] | Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	112,548	157,949	241,352
Disposals, net			(245)
Net carrying amount	113,339	112,548	157,949
Buildings [member] | Accumulated depreciation and amortisation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	(26,166)	(44,988)	(46,256)
Net carrying amount	(32,556)	(26,166)	(44,988)
Machinery [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	266,095	444,270	533,553
Additions	23,011	11,318	48,207
Deconsolidation, net		(108,993)
Reclassifications	40,840	16,626	12,459
Transfers to intangibles (Note 17)			2,119
Deduction for sale of assets	(22,885)	(55,567)	(149,202)
Disposals, net	(316)	(2,607)
Depreciation charge	(48,035)	(67,430)	(100,976)
Impairment loss	(4,232)	(5,664)	(14,328)
Depreciation for sale deductions	20,597	37,452	115,864
Translations adjustments	(3,719)	(3,310)	606
Net carrying amount	271,356	266,095	444,270
Machinery [member] | Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	694,284	998,207	1,090,460
Disposals, net			(4,032)
Net carrying amount	726,173	694,284	998,207
Machinery [member] | Accumulated depreciation and amortisation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	(428,189)	(553,937)	(556,907)
Net carrying amount	(454,817)	(428,189)	(553,937)
Vehicles [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	39,225	181,250	203,819
Additions	861	9,377	36,594
Deconsolidation, net		(110,859)	(1,527)
Reclassifications	1,033	(1,415)	2,888
Transfers to intangibles (Note 17)			724
Deduction for sale of assets	(9,531)	(32,399)	(92,079)
Disposals, net	(101)	(1,418)
Depreciation charge	(9,782)	(19,391)	(45,457)
Depreciation for sale deductions	5,232	14,868	84,145
Translations adjustments	(726)	(788)	(350)
Net carrying amount	26,211	39,225	181,250
Vehicles [member] | Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	83,345	380,724	443,641
Disposals, net			(7,507)
Net carrying amount	74,434	83,345	380,724
Vehicles [member] | Accumulated depreciation and amortisation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	(44,120)	(199,474)	(239,822)
Net carrying amount	(48,223)	(44,120)	(199,474)
Furniture and fixtures [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	9,429	14,984	20,171
Additions	687	2,145	11,607
Deconsolidation, net		(1,539)	(2,153)
Reclassifications	118	(1,430)	609
Deduction for sale of assets	(133)	(2,164)	(4,200)
Disposals, net	(187)	(292)
Depreciation charge	(2,092)	(3,954)	(11,654)
Depreciation for sale deductions	86	1,813	1,049
Translations adjustments	(13)	(134)	(23)
Net carrying amount	7,895	9,429	14,984
Furniture and fixtures [member] | Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	57,222	62,435	59,593
Disposals, net			(422)
Net carrying amount	55,710	57,222	62,435
Furniture and fixtures [member] | Accumulated depreciation and amortisation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	(47,793)	(47,451)	(39,422)
Net carrying amount	(47,815)	(47,793)	(47,451)
Other equipment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	6,901	47,024	87,801
Additions	8,693	14,122	36,179
Deconsolidation, net		(32,878)	(46,032)
Reclassifications	2,054	75	6,579
Deduction for sale of assets	(2,789)	(2,200)	(5,270)
Disposals, net	(229)	(461)
Depreciation charge	(6,137)	(18,068)	(26,928)
Depreciation for sale deductions	2,717	1,702	3,128
Translations adjustments	(31)	(2,415)	980
Net carrying amount	11,179	6,901	47,024
Other equipment [member] | Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	106,068	180,409	246,102
Disposals, net			(9,413)
Net carrying amount	111,696	106,068	180,409
Other equipment [member] | Accumulated depreciation and amortisation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	(99,167)	(133,385)	(158,301)
Net carrying amount	(100,517)	(99,167)	(133,385)
Replacement and In-transit units [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	17,749	22,873	21,692
Additions	7,036	5,577	23,802
Deconsolidation, net			(3,903)
Reclassifications	(14,163)	(10,577)	(17,524)
Transfers to intangibles (Note 17)			(964)
Deduction for sale of assets	(9)	(124)
Disposals, net			(230)
Net carrying amount	10,613	17,749	22,873
Replacement and In-transit units [Member] | Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	17,758	22,882	21,701
Net carrying amount	10,624	17,758	22,882
Replacement and In-transit units [Member] | Accumulated depreciation and amortisation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	(9)	(9)	(9)
Net carrying amount	(11)	(9)	(9)
Work in progress [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	24,564	18,695	18,853
Additions	39,584	27,431	13,178
Deconsolidation, net		(715)	(4)
Reclassifications	(31,426)	(20,408)	(6,980)
Transfers to intangibles (Note 17)			(2,048)
Disposals, net	(804)	(118)	(3,606)
Impairment loss	(15,786)		(352)
Translations adjustments		(321)	(346)
Net carrying amount	16,132	24,564	18,695
Work in progress [member] | Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	24,916	19,047	18,853
Net carrying amount	32,270	24,916	19,047
Work in progress [member] | Accumulated depreciation and amortisation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Net carrying amount	(352)	(352)	0
Net carrying amount	S/ (16,138)	S/ (352)	S/ (352)

XML

Critical Accounting Estimates and Judgments - Summary of Sensitivity Analysis Performed Considering a 10% Increase/Decrease in Group's Gross Margins (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure Of Sensitivity Analysis [line items]
Sales	S/ 2,411,880	S/ 1,961,100	S/ 2,214,108
Gross profit	441,763	674,489	502,452
Profit loss before tax	(474,726)	133,948	45,112
Sensitivity analysis [member]
Disclosure Of Sensitivity Analysis [line items]
Sales	2,411,880	1,961,100	2,214,108
Gross profit	S/ 60,317	S/ 32,685	S/ 106,902
Percentage of gross profit	2.50%	1.67%	4.83%
Percentage of gross profit, Plus 10%	2.75%	1.84%	5.31%
Increase in profit before income tax	S/ 6,010	S/ 3,399	S/ 10,667
Profit loss before tax	S/ 66,327	S/ 36,084	S/ 117,569
Profit loss before tax, Less 10%	2.25%	1.50%	4.35%
Decrease in profit before income tax	S/ (6,010)	S/ (3,399)	S/ (10,667)
Profit loss before tax on ten percentage decrease in gross margin	S/ 54,307	S/ 29,286	S/ 96,235

XML

Other Accounts Payable (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Other Accounts Payable

As of December 31, this item includes:

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Advances received from customers (a)		496,547		307,839		301,868		270,714		194,679		37,125
Consorcio Ductos del Sur - payable (b)		234,978		148,076		—		—		234,978		148,076
Salaries and other payable		97,774		87,869		97,774		87,869		—		—
Put option liability on Morelco acquisition (Note 32-b)		103,649		106,444		—		71,341		103,649		35,103
Third-party loans		11,560		11,619		11,560		9,545		—		2,074
Other taxes payable		132,775		104,444		111,444		84,235		21,331		20,209
Acquisition of non-controlling interest (Note 35-a)		22,963		22,697		22,963		22,697		—		—
Guarantee deposits		15,137		13,201		15,137		13,201		—		—
Consorcio Rio Mantaro - payables		35,531		35,625		35,531		35,625		—		—
Other accounts payables		55,865		70,592		36,392		40,078		19,473		30,514
		1,206,779		908,406		632,669		635,305		574,110		273,101

(a) Advances received from customers relate mainly to construction projects, and are discounted from invoicing, in accordance with the terms of the contracts.

(b) The other accounts payable of Consorcio Constructor Ductos del Sur correspond to payment obligations to suppliers and the main subcontractors for S/235 million, assumed by the subsidiary GyM S.A; as a result of the termination of GSP operations.

Disclosure of detailed information about advances explanatory

	Total				Current				Non-current
	2018		2019		2018		2019		2018		2019
Advances Customers Consortiums		154,660		115,250		146,764		113,093		7,896		2,157
Autoridad Autonoma del Sistema Electrico de Transporte		164,218		—		9,781		—		154,437		—
Customer advances for real estate projects		67,519		66,258		67,519		66,258		—		—
Concentradora Norte - Quellaveco		—		64,118		—		44,932		—		19,186
Special National Transportation Infrastructure Project		69,943		42,030		38,959		26,534		30,984		15,496
Talara Refinery		10,835		—		10,835		—		—		—
Others		29,372		20,183		28,010		19,897		1,362		286
		496,547		307,839		301,868		270,714		194,679		37,125

XML

Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Movement of Intangible Assets and That of Their Related Accumulated Amortization

The movement in intangible assets and the related accumulated amortization as of December 31, 2017, 2018 and 2019 is as follows:

	Goodwill			Trade- marks			Concession rights			Contractual relations with clients			Software and development costs			Costs of development of wells			Land use rights			Other assets			Total
At January 1, 2017
Cost		205,195			109,511			844,213			95,127			60,607			342,100			13,288			37,917			1,707,958
Accumulated amortization and impairment		(60,675	)		(15,845	)		(326,453	)		(62,316	)		(40,586	)		(233,378	)		—			(8,419	)		(747,672	)
Net cost		144,520			93,666			517,760			32,811			20,021			108,722			13,288			29,498			960,286
Net initial cost		144,520			93,666			517,760			32,811			20,021			108,722			13,288			29,498			960,286
Additions		—			—			38,156			5,274			3,330			49,698			—			20,832			117,290
Capitalization of interest		—			—			26,015			—			—			—			—			—			26,015
Deconsolidation, net		(3,524	)		—			(17,354	)		—			(21	)		—			—			(2,767	)		(23,666	)
Transfers from assets under construction		—			—			(11,217	)		—			2,761			5,008			—			3,617			169
Derecognition - net		—			—			(537	)		—			(1,572	)		—			—			(355	)		(2,464	)
Amortization		—			—			(24,609	)		(4,189	)		(8,091	)		(46,695	)		—			(2,973	)		(86,557	)
Impairment loss		(20,068	)		(29,541	)		—			—			—			—			—			—			(49,609	)
Translations adjustments		(4,124	)		975			13			369			1,196			—			—			177			(1,394	)
Net final cost		116,804			65,100			528,227			34,265			17,624			116,733			13,288			48,029			940,070
At December 31, 2017
Cost		197,547			110,486			841,229			98,607			59,913			396,806			13,288			59,324			1,777,200
Accumulated amortization and impairment		(80,743	)		(45,386	)		(313,002	)		(64,342	)		(42,289	)		(280,073	)		—			(11,295	)		(837,130	)
Net cost		116,804			65,100			528,227			34,265			17,624			116,733			13,288			48,029			940,070
At January 1, 2018
Cost		197,547			110,486			841,229			98,607			59,913			396,806			13,288			59,324			1,777,200
Accumulated amortization and impairment		(80,743	)		(45,386	)		(313,002	)		(64,342	)		(42,289	)		(280,073	)		—			(11,295	)		(837,130	)
Net cost		116,804			65,100			528,227			34,265			17,624			116,733			13,288			48,029			940,070
Net initial cost		116,804			65,100			528,227			34,265			17,624			116,733			13,288			48,029			940,070
Additions		—			—			23,803			—			3,267			68,544			—			5,067			100,681
Capitalization of interest		—			—			3,361			—			—			—			—			—			3,361
Desconsolidation, net		(20,086	)		(8,358	)		(22,758	)		(8,909	)		(10,153	)		—			—			(1,863	)		(72,127	)
Transfers from assets under construction		—			—			—			—			199			—			—			(199	)		—
Derecognition - cost		—			—			(16	)		—			(1,941	)		(4,126	)		—			—			(6,083	)
Amortization		—			—			(50,776	)		(7,996	)		(5,834	)		(41,930	)		—			(5,536	)		(112,072	)
Translations adjustments		(3,430	)		(4,301	)		199			(303	)		830			—			—			270			(6,735	)
Net final cost		93,288			52,441			482,040			17,057			3,992			139,221			13,288			45,768			847,095
At December 31, 2018
Cost		174,031			97,097			836,254			85,482			16,177			461,224			13,288			58,267			1,741,820
Accumulated amortization and impairment		(80,743	)		(44,656	)		(354,214	)		(68,425	)		(12,185	)		(322,003	)		—			(12,499	)		(894,725	)
Net cost		93,288			52,441			482,040			17,057			3,992			139,221			13,288			45,768			847,095
At January 1, 2019
Cost		174,031			97,097			836,254			85,482			16,177			461,224			13,288			58,267			1,741,820
Accumulated amortization and impairment		(80,743	)		(44,656	)		(354,214	)		(68,425	)		(12,185	)		(322,003	)		—			(12,499	)		(894,725	)
Net cost		93,288			52,441			482,040			17,057			3,992			139,221			13,288			45,768			847,095
Net initial cost		93,288			52,441			482,040			17,057			3,992			139,221			13,288			45,768			847,095
Additions		—			—			26,645			—			3,745			102,022			—			5,212			137,624
Capitalization of interest expenses		—			—			2,725			—			—			—			—			802			3,527
Transfers from assets under construction		—			—			—			—			672			—			—			(672	)		—
Derecognition - net		(930	)		—			—			—			(2,015	)		—			—			(4,106	)		(7,051	)
Amortization		—			—			(49,049	)		(3,682	)		(5,308	)		(43,552	)		—			(3,687	)		(105,278	)
Impairment loss		(33,089	)		—			(3,213	)		—			—			—			(2,468	)		—			(38,770	)
Impairment reversal		—			20,676			—			—			—			—			—			—			20,676
Translations adjustments		(1,902	)		(2,471	)		—			(114	)		(21	)		—			—			—			(4,508	)
Reclassifications		—			49			(15,198	)		(12,760	)		19,410			(3,717	)		—			12,216			—
Net final cost		57,367			70,695			443,950			501			20,475			193,974			10,820			55,533			853,315
At December 31, 2019
Cost		93,887			73,836			710,290			72,810			48,073			558,530			13,288			113,057			1,683,771
Accumulated amortization and impairment		(36,520	)		(3,141	)		(266,340	)		(72,309	)		(27,598	)		(364,556	)		(2,468	)		(57,524	)		(830,456	)
Net cost		57,367			70,695			443,950			501			20,475			193,974			10,820			55,533			853,315

Summary of Goodwill Allocated to Cash-Generating Units (CGU)

At December 31, the goodwill of the cash-generating units (CGUs) is distributed as follows:

	2017		2018		2019
Engineering and construction		75,051		71,621		36,632
Electromechanical		20,737		20,737		20,735
Mining and construction services		13,366		—		—
IT equipment and services		930		930		—
Telecommunications services		6,720		—		—
		116,804		93,288		57,367

Summary of Major Assumptions Used by the Group in Determining the Fair Value Less Cost of Disposal

The main assumptions used by the Group to determine fair value less disposal costs and value in use are as follows:

	Engineering and construction			Electro- mechanical
	%			%
2017
Gross margin		9.50	%		8.00	%
Terminal growth rate		3.00	%		2.00	%
Discount rate		11.18	%		11.48	%
2018
Gross margin		12.67	%		7.63	%
Terminal growth rate		3.00	%		2.00	%
Discount rate		12.55	%		11.44	%
2019
Gross margin		12.43	%		8.86	%
Terminal growth rate		3.00	%		2.00	%
Discount rate		11.83	%		11.40	%

The main assumptions used by the Group to determine fair value less cost of sales are as follows:

	Engineering and construction
	Morelco			Vial y Vives- DSD
	%			%
2017
Average revenue growth rate		9.60	%		25.00	%
Terminal growth rate		3.00	%		4.00	%
Discount rate		11.18	%		14.80	%
2018
Average revenue growth rate		12.25	%		19.58	%
Terminal growth rate		3.00	%		3.00	%
Discount rate		12.55	%		14.00	%
2019
Average revenue growth rate		5.70	%		19.58	%
Terminal growth rate		3.00	%		2.00	%
Discount rate		11.83	%		14.12	%

Summary of Amortization of Intangibles

Amortization of intangibles is broken down in the consolidated income statement as follows:

	2017		2018		2019
Cost of sales and services (Note 26)		67,381		98,318		99,589
Administrative expenses (Note 26)		3,002		4,856		5,689
(+) Amortization discontinued operations		16,174		8,898		—
		86,557		112,072		105,278

Disclosure Of Detailed Information About Concessions

As of December 31, mainly include intangibles of Norvial S.A.:

	2018		2019
EPC Contract		70,133		62,319
Construction of the second tranch of the “Ancon- Huacho-Pativilca” highway		12,463		4,809
Cost of capitalized indebtedness at effective interest rates between 7.14% and 8.72%		9,836		950
Road improvement		15,558		14,449
Implementation for road safety		6,283		8,152
Work capitalization of second roadway		310,417		314,614
Disbursements for land adquisition		4,757		4,233
Other intangible assets contracted for the delivery process		6,775		7,477
Total Norvial S.A.		436,222		417,003
Other concessions		45,818		26,947
		482,040		443,950

XML

Property, Plant and Equipment, Net and Right-of-Use Assets - Summary of Group Recognized Assets And Liabilities For Right-Of-Use (Detail) S/ in Thousands	12 Months Ended
	Dec. 31, 2019 PEN (S/)
Disclosure of quantitative information about right-of-use assets [line items]
Addition of liabilities for right-of-use	S/ 101,745
Depreciation charge	(22,958)
Translations adjustments	26
Net final carrying amount	78,813
Gross carrying amount [member]
Disclosure of quantitative information about right-of-use assets [line items]
Net final carrying amount	101,771
Accumulated depreciation and amortisation [member]
Disclosure of quantitative information about right-of-use assets [line items]
Net final carrying amount	(22,958)
Buildings [member]
Disclosure of quantitative information about right-of-use assets [line items]
Addition of liabilities for right-of-use	63,479
Depreciation charge	(7,541)
Translations adjustments	26
Net final carrying amount	55,964
Buildings [member] | Gross carrying amount [member]
Disclosure of quantitative information about right-of-use assets [line items]
Net final carrying amount	63,505
Buildings [member] | Accumulated depreciation and amortisation [member]
Disclosure of quantitative information about right-of-use assets [line items]
Net final carrying amount	(7,541)
Machinery And Equipment [Member]
Disclosure of quantitative information about right-of-use assets [line items]
Addition of liabilities for right-of-use	18,597
Depreciation charge	(6,899)
Net final carrying amount	11,698
Machinery And Equipment [Member] | Gross carrying amount [member]
Disclosure of quantitative information about right-of-use assets [line items]
Net final carrying amount	18,597
Machinery And Equipment [Member] | Accumulated depreciation and amortisation [member]
Disclosure of quantitative information about right-of-use assets [line items]
Net final carrying amount	(6,899)
Vehicles [member]
Disclosure of quantitative information about right-of-use assets [line items]
Addition of liabilities for right-of-use	19,669
Depreciation charge	(8,518)
Net final carrying amount	11,151
Vehicles [member] | Gross carrying amount [member]
Disclosure of quantitative information about right-of-use assets [line items]
Net final carrying amount	19,669
Vehicles [member] | Accumulated depreciation and amortisation [member]
Disclosure of quantitative information about right-of-use assets [line items]
Net final carrying amount	S/ (8,518)

XML

Financial Risk Management - Schedule of Information About Gearing Ratio (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure of Gearing Ratio [abstract]
Total financial liabilities and bonds	S/ 1,723,108	S/ 2,139,714
Less: Cash and cash equivalent	(948,978)	(801,140)	S/ (626,180)
Net debt	774,130	1,338,574
Total equity	1,876,085	2,489,931	S/ 2,589,078	S/ 2,489,737
Total capital	S/ 2,650,215	S/ 3,828,505
Gearing ratio	0.29%	0.35%

XML

Inventories - Additional Information (Detail) - PEN (S/) S/ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Disclosure of inventories [line items]
Capitalised financing cost	S/ 3,700	S/ 7,900
Construction material	59,879	27,852
Impairment of Finished Properties	4,500
Land to Finished Product [Member]
Disclosure of inventories [line items]
Commercial premises	22,900
Stock in Finished Product [Member]
Disclosure of inventories [line items]
Commercial premises	6,300
Viva GyM [member]
Disclosure of inventories [line items]
Impairment loss	5,200	9,200
GyM S.A. [member]
Disclosure of inventories [line items]
Impairment loss		31,000
Construction material	S/ 57,400	S/ 27,800
Bottom of range [member]
Disclosure of inventories [line items]
Interest rate	7.00%	7.00%
Bottom of range [member] | GyM S.A. [member]
Disclosure of inventories [line items]
Interest rate	1.00%
Top of range [member]
Disclosure of inventories [line items]
Interest rate	12.00%	12.00%
Top of range [member] | GyM S.A. [member]
Disclosure of inventories [line items]
Interest rate	11.00%

XML

Other Accounts Receivable - Schedule of Income Tax Payments (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Other Accounts Receivable [line items]
Current receivables from taxes other than income tax	S/ 70,647	S/ 91,353
GyM S.A. [member]
Other Accounts Receivable [line items]
Current receivables from taxes other than income tax	45,628	55,377
GMI S.A. [member]
Other Accounts Receivable [line items]
Current receivables from taxes other than income tax	7,203	3,877
GMP S.A. [member]
Other Accounts Receivable [line items]
Current receivables from taxes other than income tax	2,400	8,511
Concar S.A. [member]
Other Accounts Receivable [line items]
Current receivables from taxes other than income tax	3,709	8,563
Viva GyM S.A. [member]
Other Accounts Receivable [line items]
Current receivables from taxes other than income tax	3,485	8,114
Grana Y Montero S.A.A. [member]
Other Accounts Receivable [line items]
Current receivables from taxes other than income tax	2,895	6,463
Norvial S.A. [member]
Other Accounts Receivable [line items]
Current receivables from taxes other than income tax	4,266
Survial S.A. [member]
Other Accounts Receivable [line items]
Current receivables from taxes other than income tax	426	334
Other [member]
Other Accounts Receivable [line items]
Current receivables from taxes other than income tax	S/ 635	S/ 114

XML

Inventories - Schedule of Inventories of Finished Properties (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Disclosure of inventories [line items]
Finished properties	S/ 86,190	S/ 76,027
El Rancho [member]
Disclosure of inventories [line items]
Finished properties	2,347	19,314
Los Parques de San Martin de Porres [Member]
Disclosure of inventories [line items]
Finished properties	903	4,029
Los Parques del Callao [member]
Disclosure of inventories [line items]
Finished properties	10,914	389
Rivera Navarrete [member]
Disclosure of inventories [line items]
Finished properties	131	4,053
Los Parques de Carabayllo [Member]
Disclosure of inventories [line items]
Finished properties	168	942
Los Parques de Comas [member]
Disclosure of inventories [line items]
Finished properties	37,605	18,785
Los Parques de Villa El Salvador II [member]
Disclosure of inventories [line items]
Finished properties	117	4,277
Klimt [member]
Disclosure of inventories [line items]
Finished properties	5,978	5,911
Huancayo [member]
Disclosure of inventories [line items]
Finished properties	19,672	15,546
Others [member]
Disclosure of inventories [line items]
Finished properties	S/ 3,900	S/ 2,781

XML

Trade Accounts Payable

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Trade Accounts Payable

20 TRADE ACCOUNTS PAYABLE

As of December 31, this item includes:

	2018		2019
Invoices payable (a)		591,619		352,287
Provision of contract costs (b)		378,670		746,408
Notes payable		109,242		37,426
		1,079,531		1,136,121

(a) Invoices payable are obligations accredited with formal documents. The following are the invoices payable according to main projects:

	2018		2019
Infrastructure
Linea 1 - Metro de Lima		93,463		15,125
Oil services		49,254		46,932
Operation and maintenance - Roads		60,334		16,131
		203,051		78,188
Engineering and Construction
Works and Consortiums		128,159		64,571
Talara Refinery		101,103		59,740
Engineering and Construction Works VYV - DSD Chile Ltda.		26,184		26,368
Civil Works, Assembly and Electromechanics - Toquepala		23,957		10,325
North Concentrator Plant - Quellaveco		7,564		26,589
Engineering and Construction Works - Morelco S.A.S.		19,504		8,141
Generating Plant Machu Picchu		7,789		6,575
Project Mina Gold Fields La Cima S.A.		5,060		5,302
Civil works, assembly and electromechanics - Acero Arequipa		3,062		5,421
Others		5,319		15,091
		327,701		228,123
Real Estate		18,365		26,072
Parent Company Operation		42,502		19,904
		591,619		352,287

b) Provision of contract costs are obligations not accredited with formal documents. Below are the services received not billed according to main projects:

	2018		2019
Infrastructure
Linea 1 - Metro de Lima		11,189		13,383
Oil services		—		20,512
Operation and maintenance - Roads		1,020		18,763
		12,209		52,658
Engineering and Construction
Talara Refinery		115,870		418,540
Works and Consortiums		105,681		68,239
Engineering and Construction Works VYV - DSD		51,412		68,140
Engineering and Construction Works - Morelco SAS		27,570		34,804
North Concentrator Plant - Quellaveco		10,030		24,185
Mina Project of Gold Fields La Cima S.A.		8,520		15,050
Civil Works, Assembly and Electromechanics - Acero Arequipa		4,932		17,382
Civil Works, Assembly and Electromechanics - Toquepala		5,283		5,055
Generating Plant Machu Picchu		2,376		4,633
Others		8,513		23,063
		340,187		679,091
Real Estate		12,808		13,573
Parent Company Operation		13,466		1,086
		378,670		746,408

XML

Cash and Cash Equivalent- Summary of Cash and Cash Equivalents (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disclosure Of Cash And Cash Equivalents [abstract]
Cash on hand	S/ 1,323	S/ 1,377
Remittances in-transit	5,664	3,566
Bank accounts	223,378	313,253
Escrow account	552,439	334,579
Time deposits	166,174	148,365
Total	S/ 948,978	S/ 801,140	S/ 626,180

XML

Cash and Cash Equivalent- Summary of Reconcile to the Amount of Cash Shown in the Statement of Cash Flow (Detail) - PEN (S/) S/ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure Of Cash And Cash Equivalents [abstract]
Cash and cash equivalent on consolidated statement of financial position	S/ 948,978	S/ 801,140	S/ 626,180
Bank overdrafts (Note 18)		(119)	(120)
Balances per consolidated statement of cash flows	S/ 948,978	S/ 801,021	S/ 626,060	S/ 598,554

XML

Property, Plant and Equipment, Net and Right-of-Use Assets

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Property, Plant and Equipment, Net and Right-of-Use Assets

16 PROPERTY, PLANT AND EQUIPMENT, NET AND RIGHT-OF-USE ASSETS

16.1. PROPERTY, PLANT AND EQUIPMENT

The movement in property, plant and equipment accounts and its related accumulated depreciation for the year ended December 31, 2017, 2018 and 2019 is as follows:

	Land			Buildings			Machinery			Vehicles			Furniture and fixtures			Other equipment			Replacement and in-transit units			Work in progress			Total
At January 1, 2017
Cost		32,614			241,352			1,090,460			443,641			59,593			246,102			21,701			18,853			2,154,316
Accumulated depreciation and impairment		—			(46,256	)		(556,907	)		(239,822	)		(39,422	)		(158,301	)		(9	)		—			(1,040,717	)
Net carrying amount		32,614			195,096			533,553			203,819			20,171			87,801			21,692			18,853			1,113,599
Net initial carrying amount		32,614			195,096			533,553			203,819			20,171			87,801			21,692			18,853			1,113,599
Additions		157			2,724			48,207			36,594			11,607			36,179			23,802			13,178			172,448
Deconsolidation, net		(3,713	)		(26,109	)		—			(1,527	)		(2,153	)		(46,032	)		(3,903	)		(4	)		(83,441	)
Reclassifications, net		—			1,969			12,459			2,888			609			6,579			(17,524	)		(6,980	)		—
Transfers to intangibles (Note 17)		—			—			2,119			724			—			—			(964	)		(2,048	)		(169	)
Deduction for sale of assets		(5,616	)		(51,736	)		(149,202	)		(92,079	)		(4,200	)		(5,270	)		—			—			(308,103	)
Disposals, net		—			(245	)		(4,032	)		(7,507	)		(422	)		(9,413	)		(230	)		(3,606	)		(25,455	)
Depreciation charge		—			(12,469	)		(100,976	)		(45,457	)		(11,654	)		(26,928	)		—			—			(197,484	)
Impairment loss		—			—			(14,328	)		—			—			—			—			(352	)		(14,680	)
Depreciation for sale deductions		—			3,579			115,864			84,145			1,049			3,128			—			—			207,765
Translations adjustments		236			152			606			(350	)		(23	)		980			—			(346	)		1,255
Net final carrying amount		23,678			112,961			444,270			181,250			14,984			47,024			22,873			18,695			865,735
At December 31, 2017
Cost		23,678			157,949			998,207			380,724			62,435			180,409			22,882			19,047			1,845,331
Accumulated depreciation and impairment		—			(44,988	)		(553,937	)		(199,474	)		(47,451	)		(133,385	)		(9	)		(352	)		(979,596	)
Net carrying amount		23,678			112,961			444,270			181,250			14,984			47,024			22,873			18,695			865,735
At January 1, 2018
Cost		23,678			157,949			998,207			380,724			62,435			180,409			22,882			19,047			1,845,331
Accumulated depreciation and impairment		—			(44,988	)		(553,937	)		(199,474	)		(47,451	)		(133,385	)		(9	)		(352	)		(979,596	)
Net carrying amount		23,678			112,961			444,270			181,250			14,984			47,024			22,873			18,695			865,735
Net initial carrying amount		23,678			112,961			444,270			181,250			14,984			47,024			22,873			18,695			865,735
Additions		—			13,216			11,318			9,377			2,145			14,122			5,577			27,431			83,186
Desconsolidation, net		(3,183	)		(33,989	)		(108,993	)		(110,859	)		(1,539	)		(32,878	)		—			(715	)		(292,156	)
Reclassifications		—			17,129			16,626			(1,415	)		(1,430	)		75			(10,577	)		(20,408	)		—
Deduction for sale of assets		—			(3,527	)		(55,567	)		(32,399	)		(2,164	)		(2,200	)		(124	)		—			(95,981	)
Disposals, net		—			(9,723	)		(2,607	)		(1,418	)		(292	)		(461	)		—			(118	)		(14,619	)
Depreciation charge		—			(14,257	)		(67,430	)		(19,391	)		(3,954	)		(18,068	)		—			—			(123,100	)
Impairment loss		—			—			(5,664	)		—			—			—			—			—			(5,664	)
Depreciation for sale deductions		—			1,189			37,452			14,868			1,813			1,702			—			—			57,024
Translations adjustments		(286	)		3,383			(3,310	)		(788	)		(134	)		(2,415	)		—			(321	)		(3,871	)
Net final carrying amount		20,209			86,382			266,095			39,225			9,429			6,901			17,749			24,564			470,554
At December 31, 2018
Cost		20,209			112,548			694,284			83,345			57,222			106,068			17,758			24,916			1,116,350
Accumulated depreciation and impairment		—			(26,166	)		(428,189	)		(44,120	)		(47,793	)		(99,167	)		(9	)		(352	)		(645,796	)
Net carrying amount		20,209			86,382			266,095			39,225			9,429			6,901			17,749			24,564			470,554
At January 1, 2019
Cost		20,209			112,548			694,284			83,345			57,222			106,068			17,758			24,916			1,116,350
Accumulated depreciation and impairment		—			(26,166	)		(428,189	)		(44,120	)		(47,793	)		(99,167	)		(9	)		(352	)		(645,796	)
Net carrying amount		20,209			86,382			266,095			39,225			9,429			6,901			17,749			24,564			470,554
Net initial carrying amount		20,209			86,382			266,095			39,225			9,429			6,901			17,749			24,564			470,554
Additions		290			396			23,011			861			687			8,693			7,036			39,584			80,558
Transfer to investment property (i)		(273	)		(1,187	)		—			—			—			—			—			—			(1,460	)
Reclassifications		—			1,544			40,840			1,033			118			2,054			(14,163	)		(31,426	)		—
Deduction for sale of assets		—			(78	)		(22,885	)		(9,531	)		(133	)		(2,789	)		(9	)		—			(35,425	)
Disposals, net		—			—			(316	)		(101	)		(187	)		(229	)		—			(804	)		(1,637	)
Depreciation charge		—			(5,992	)		(48,035	)		(9,782	)		(2,092	)		(6,137	)		—			—			(72,038	)
Impairment loss		—			—			(4,232	)		—			—			—			—			(15,786	)		(20,018	)
Depreciation for sale deductions		—			78			20,597			5,232			86			2,717			—			—			28,710
Translations adjustments		(525	)		(360	)		(3,719	)		(726	)		(13	)		(31	)		—			—			(5,374	)
Net final carrying amount		19,701			80,783			271,356			26,211			7,895			11,179			10,613			16,132			443,870
At December 31, 2019
Cost		19,974			113,339			726,173			74,434			55,710			111,696			10,624			32,270			1,144,220
Accumulated depreciation and impairment		(273	)		(32,556	)		(454,817	)		(48,223	)		(47,815	)		(100,517	)		(11	)		(16,138	)		(700,350	)
Net carrying amount		19,701			80,783			271,356			26,211			7,895			11,179			10,613			16,132			443,870

(i) During 2019, a property owned by Morelco S.A.S. (subsidiary of GyM S.A) was transferred to investment properties to the leased to a third party.

In 2017, 2018 and 2019, additions to cost correspond to acquisitions of fixed assets made under financial leases or direct purchases.

The balance of work in progress as of December 31, 2019, is related to investments made by the subsidiary GMP S.A. for S/15.2 million (S/17.3 million as of December 31, 2018 and S/11.0 million as of December 31, 2017) for drilling activities to increase the exploitation of oil and gas. In 2018, the balance included the construction works of the Larcomar Hotel Project for S/15.8 million (S/15.6 million in 2017).

In 2019 the sale of fixed assets amounted to S/12.7 million (S/31.9 million in 2018 and S/127.2 million in 2017), generating a gain of S/6.1 million (loss of S/7.1 million in 2018 and gain of S/26.9 million in 2017), which is shown in the statement of income under the caption “other income and expenses, net” (Note 28). The difference of income from the sale of fixed assets and the gain generated are presented under the caption “income from construction activities” and in “gross profit”, respectively.

Depreciation of property, plant and equipment and investment property is distributed in the income statement as follows:

	2017			2018			2019
Cost of services and goods (Note 26)		103,566			81,199			95,445
Administrative expenses (Note 26)		5,776			5,135			1,907
(+) Depreciation discontinued operations		90,452			39,085			—
Total depreciation related to property, plant and equipment and investment property		199,794			125,419			97,352
(-) Depreciation related to investment property		(2,310	)		(2,319	)		(2,356	)
(-) Depreciation related to right-of-use assets		—			—			(22,958	)
Total depreciation of property, plant and equipment		197,484			123,100			72,038

At 31 December 2019, the Group had fully depreciated assets in use of S/319.2 million (S/424.5 million in 2018 and S/154 million in 2017).

The net carrying amount of machinery and equipment, vehicles and furniture and fixtures acquired under finance lease contracts are broken down as follows:

	At December 31,
	2017			2018			2019
Cost of acquisition		650,301			86,881			67,310
Accumulated depreciation		(351,447	)		(38,026	)		(44,671	)
Net carrying amount		298,854			48,855			22,639

Other financial liabilities are secured by property, plant and equipment for S/111.9 million (S/162.9 million in 2018 and S/368.1 million in 2017).

16.2. RIGHT-OF-USE ASSETS

As of December 31, 2019, the Group recognized assets and liabilities for right-of-use, as shown in the following table:

	Buildings			Machinery and equipments			Vehicles			Total
At January 1, 2019
Additions		63,479			18,597			19,669			101,745
Depreciation charge		(7,541	)		(6,899	)		(8,518	)		(22,958	)
Translations adjustments		26			—			—			26
Net final carrying amount		55,964			11,698			11,151			78,813
At December 31, 2019
Cost		63,505			18,597			19,669			101,771
Accumulated depreciation		(7,541	)		(6,899	)		(8,518	)		(22,958	)
Net carrying amount		55,964			11,698			11,151			78,813

The expense for depreciation of right-of-use assets for the year ended December 31, 2019 has been distributed in the following items of the consolidated statement of income:

	2019
Cost of services and goods		20,011
Administrative expenses		2,947
		22,958

The costs related to the leasing of machinery and equipment for which the Group applied the exceptions described in paragraph 5 of IFRS 16 are the following:

Leases under 12 months: S/167.3 million.

Leases of low value assets: S/7 million.

Likewise, leases whose payments are entirely variable, which depend on their future performance or use, were excluded, during the year 2019 the expenditure was: S/0.6 million.